CHUAN HUP HOLDINGS LIMITED

Transcription

ANNUAL
R E P O R T
2012
CONTENTS
01
About Us
02
Chairman’s Statement
04
Our Investments
06
Board of Directors
08
Key Management
09
Corporate Data and Financial Calendar
10
Group Financial Highlights
12
Corporate Governance Report
21
Financial Statements
90
Statistics of Shareholdings
91
Notice of Annual General Meeting
Proxy Form
About Us
Chuan Hup Holdings Limited (“Chuan
Hup”) was founded in 1970 as a
tug and barge service provider for
the PSA Corporation in Singapore.
Chuan Hup subsequently developed
a core competency in the provision
of marine transportation services
to the mining and energy sectors
within the ASEAN region. In so doing,
Chuan Hup established itself as one
of the leading owners and operators
of marine transport equipment to
the resource industry. The Company
has been listed on the Mainboard of
the Singapore Exchange Securities
Trading Limited (“SGX-ST”) since
1983. Chuan Hup diversified its
activities into other areas such as
electronics manufacturing services,
and property development. Its
business unit in the electronics
manufacturing services industry was
listed on the Sesdaq of the SGX-ST
in 1992 and thereafter transferred
to the Mainboard of the SGX-ST in
1995. PCI Limited (“PCI”) has since
formed part of Chuan Hup’s core
investment portfolio. Subsequent to
the mandatory conditional cash offer
launched by Chuan Hup in May 2011,
PCI became a subsidiary of Chuan
Hup.
In 2002, Chuan Hup reorganised its
marine business, based on industry
focus, into two distinct business
units. The two separate business
operations
mainly
comprised
offshore support services to the oil
and gas industry and marine logistics
services. The business unit which
provided offshore support services
to the oil and gas industry was listed
as CH Offshore Ltd (“CHO”) on the
SGX-ST in 2003.
During 2005, Chuan Hup divested
its entire marine logistics services
business and 29.1%, out of a total
interest of 52.8%, in CHO to Scomi
Marine Berhad (“Scomi”), for a
consideration in cash and 28.9%
interest in Scomi. Vessel management
activities have subsequently been
scaled down. The entire shareholding
in Scomi was divested in 2011. Chuan
Hup has retained its shareholding
interest in CHO and remains a
substantial shareholder to-date.
Chuan Hup has been involved in
property
development
projects
for over a decade. As a property
developer, Chuan Hup successfully
launched its first residential project
in Singapore, The Clementvale, in
1999, which was fully sold in record
time. It has invested in properties
in Australia and Philippines directly
or via an equity stake. Joint venture
arrangements have enabled Chuan
Hup to leverage on the expertise
of local business partners in these
development projects overseas.
Past developments have been well
received and fully sold on completion.
Current development projects include
Symphony City in Perth and Signa
Designer Residences in Manila.
With the successful public listing of
its business units in the electronics
manufacturing services industry and
the offshore support services to the
oil and gas industry over the last two
decades, Chuan Hup has repositioned
itself as an investment holding
company with a diversified portfolio
of core investments in industries in
relation to electronics manufacturing
services, offshore support services to
the oil and gas industry and property
development.
Chuan Hup will continue to maintain a
prudent stance as it focuses its efforts
to seek investment opportunities that
will enhance returns in the short-term
and contribute to sustainable longterm growth in shareholder value of
the Company.
ANNUAL REPORT 2012
01
Chairman’s Statement
Prof. Tan Cheng Han, S.C.
Non-Executive, Independent Director and Chairman
Review of FY 2012
Balance Sheet
Property
FY 2012 was a year of consolidation.
Following a mandatory conditional
cash offer to acquire PCI Limited
(“PCI”) during the previous financial
year, PCI became a subsidiary of the
Company in the last quarter of FY
2011. In FY 2012, we had the benefit of
consolidating its full year results. This
led to a significant increase in Group
revenue to USD 249.47 million for FY
2012 compared to USD 53.41 million
in FY 2011. Group profit after tax for
FY 2012 was USD 46.53 million, 7%
below USD 50.24 million in FY 2011.
The Group balance sheet remained
healthy with cash and bank balances
of USD 81.61 million compared with
USD 78.56 million as at 30 June 2011,
of which PCI’s cash and bank balances
as at 30 June 2012 accounted for USD
47.66 million, as compared to USD
45.89 million in the previous year.
Shareholders’ funds amounted to
USD 281.92 million, 0.8% below USD
284.28 million as at 30 June 2011.
Our property investments
progressing well.
In the first quarter of FY 2012, we reassessed the Group’s investment in
CH Offshore Ltd and reclassified it
from an available-for-sale investment
to an associate, in accordance with
accounting standards. This resulted
in a gain on re-measurement to fair
value of available-for-sale investments
of USD 27.46 million.
02
ANNUAL REPORT 2012
Net asset value per share was US
cents 30.20 as at 30 June 2012,
compared to US cents 30.45 as at 30
June 2011.
Dividend
The Board is pleased to recommend
a one-tier tax exempt first and final
dividend of 1 SG cent per ordinary
share for FY 2012, amounting to a
total dividend of SGD 9.34 million for
the year.
are
Adagio Apartments, the first phase
of Symphony City, the Group’s joint
venture property development project
in East Perth, Western Australia
with Australian-listed Finbar Group
Limited, has sold approximately
48% of its units valued at AUD 85.70
million. Construction has progressed
to level 20 of the structure and internal
fit-out of the lower floors is underway.
Signa Designer Residences, the highend condominium project in Manila of
Securities Land Corporation, in which
the Group has an equity stake, and its
joint venture partner, Robinsons Land
Corporation, has pre-sold about 62%
of the available units in Tower 1 and
7% of the available units in Tower 2.
Construction of Tower 1 was about
42% completed as at June 2012 and
construction of Tower 2 commenced
in August 2012.
Corporate Social Responsibility
On the community front, we continued
to contribute to the Singapore Cancer
Society and to support its fund raising
activities. We also continued to
support educational programmes for
children in Singapore.
Outlook
The global economic outlook remains
uncertain with the unresolved
Eurozone debt crisis, stagnant US
economy and slowdown in China.
All these factors may affect the
performance of the Group.
The Board will continue to be
conservative when considering new
investments.
from the Board at the last Annual
General Meeting. Dr Tan served as
Non-Executive Chairman for twenty
years. We are grateful to Dr Tan for
his invaluable contributions and wise
counsel over the years.
It gives me great pleasure to welcome
Mr Lim Kwee Siah back to the Board.
Mr Lim, who re-joined the Board
in December 2011, was Executive
Director from 1989 to 2005 and
oversaw the accounting, financial and
administrative matters of the Group.
We will benefit greatly from his
extensive experience and knowledge
of the Group.
continuing support of Chuan Hup.
With our strong balance sheet and
the commitment of all stakeholders,
the Group is well positioned to meet
the challenges ahead.
Non-Executive Chairman
31 August 2012
I would also like to commend
Management and all staff for their
hard work and dedication.
Acknowledgements
I would like to take this opportunity
to record our deep appreciation to
Dr Tan Cheng Bock, who retired
Last but not least, I would like to
express our appreciation to our loyal
shareholders for their faith in and
ANNUAL REPORT 2012
03
Our Investments
Our Commitment
As an investment holding company,
Chuan Hup is committed towards
achieving sustainable growth in
the long-term for its shareholders.
We adopt a prudent and disciplined
approach in our investment decisions,
maintaining a consistent focus on
core fundamentals with a long-term
perspective. Our investment portfolio
is closely monitored and carefully
assessed. We do not engage in
speculative trading activities nor
invest in speculative stocks. We
continually seek opportunities to
enhance our returns over the shortterm and long-term horizon. Our
investment decisions to rebalance
our portfolio are made based on
market opportunities, and the criteria
of providing high levels of income
through dividends, interest yield and
capital growth.
Core Investments
Our core investment portfolio
comprises quality equity investments
that we intend to hold for the longterm. These are companies that
have demonstrated sound business
models, professional management
teams with a strong culture of
integrity, the capacity for sustainable
growth and a track record of delivering
good dividend yield. As a shareholder,
we rely on the independent
governance of respective boards
and management teams in their
commercial decisions on strategic
matters and day-to-day business
operations. We believe in maintaining
close ties with these companies,
through effective communication, to
share an alignment of our common
goal of achieving higher returns for
our shareholders.
04
ANNUAL REPORT 2012
i. Electronics Manufacturing Services
Chuan Hup has been a substantial
shareholder of PCI Limited (“PCI”)
for many years. PCI is an electronics
manufacturing services company
engaged in the assembly of printed
circuit board, customer interface
design and manufacture, and full
turnkey electronics manufacturing. It
commands a global customer base
of leading technology companies,
as it adds value by offering services
at all points in the manufacturing
outsourcing cycle, which includes
design, manufacturing engineering,
material sourcing and procurement,
assembly, test and logistics. PCI’s ISO
certificates received for its Singapore,
Batam and Shanghai operations attest
to its uncompromising commitment
towards meeting the exacting quality
standards of its customers.
subsidiary. Our shareholding at 30
June 2012 stands at 76.16%.
ii. Properties
Finbar Group Limited
We are a substantial shareholder
of Finbar Group Limited (“Finbar”),
an Australian property development
company listed on the Australian
Stock Exchange. As at 30 June 2012,
our shareholding interest amounts to
17.54%.
Finbar’s business model involves
the direct acquisition of suitable
development land, as well as forming
joint ventures where equity partners
are sought to allow Finbar to leverage
into larger redevelopment projects
to take advantage of the benefits of
economies of scale and to spread
project risk.
In the midst of challenging business
environment
and
uncertain
global economic outlook, PCI has
continued to increase its customer
base. It is evident that PCI has
forged a reputation for its strong
operating capabilities and technical
competencies. PCI will continue its
efforts to deepen relationships with
its customers. Ongoing investments
are made to further advance its
technical know-how and increase
operating efficiencies, as this is the
foundation upon which PCI’s success
is built. PCI has also successfully
expanded into the warehousing and
logistics business during 2012.
Its core business lies in the
development of medium to high
density
residential
apartments
and commercial property within
Western Australia, where it carries
out development projects in its
own right or through incorporated
special purpose entities and joint
venture companies, in which Finbar
directly or indirectly holds interests
in project profitability and earns
project management fees. It has
also retained interests in commercial
space in Perth metropolitan and
Pilbara office buildings to generate
recurring
investment
income
which supplements core property
development income.
PCI was listed on the Sesdaq of
the SGX-ST in 1992 and thereafter
transferred to the Mainboard of
the SGX-ST in 1995. Subsequent
to a mandatory conditional cash
offer made in 2011, PCI became our
Finbar’s long-term commitment is
to provide the best social outcome
for local communities and establish
assets that transform lifestyles using
fresh ideas and concepts. Finbar has
established itself as the market leader
in built form apartment development
in the Perth metropolitan area and
the Pilbara region. Finbar has been
selected by the State Government
of Western Australia as the preferred
developer of residential apartment
accommodation in Port Hedland. This
is evidence of its highly successful
expansion into the affluent North West
of the state by providing apartment
accommodation for communities
that support the resources sector.
This reinforces Finbar’s position as
Western Australia’s largest and most
reliable apartment developer.
Symphony City,
East Perth, Western Australia
We entered into a joint venture
with Finbar in 2009 to tap on its
property development expertise to
redevelop our property, the former
Australian Broadcasting Corporation
(“ABC”) site, located in East Perth,
Western Australia. Symphony City
will be launched in 3 stages – Adagio,
Toccata, Concerto and Harmony.
Development plans for Adagio
and Toccata comprise two luxury
residential apartment towers with
panoramic views of the Swan River.
Concerto and Harmony forms a mixed
development block situated along
Adelaide Terrace, which will integrate
former ABC buildings to preserve
the heritage significance of this site.
Within easy reach of Perth CBD, high
standards of city living lifestyle can
be expected at Symphony City.
Stage 1 of the redevelopment, Adagio
Apartments, comprises 113 luxurious
2 and 3 bedroom apartments over 23
storeys overlooking the Swan River.
Signa Designer Residences,
Makati, Manila, Philippines
We have an equity stake of 32.52% in
Security Land Corporation (“SLC”), a
property investment and development
company in the Philippines. SLC
owns a property along Ayala Avenue,
in the prime commercial and
business district in Makati, Manila.
SLC has entered into a joint venture
with Robinsons Land Corporation
(“RLC”), one of Philippines’ leading
real estate companies, which is listed
on the Philippines Stock Exchange.
SLC has contributed the property as
equity to the joint venture, while RLC
is responsible for the financing and
construction of the project.
The new development, Signa Designer
Residences, which is in collaboration
with three prominent Filipino architect
and designers, will feature two highend 29-storey residential towers
of 1, 2 and 3 bedroom apartment
units. Completion of renovation and
refurbishment works on the existing
adjacent office building, wholly
owned by SLC, has created more
lettable area and attracted higher
premium tenants. Rental yield has
been further enhanced by the award
of PEZA Registration Certificate
which allows export oriented tenants
to be entitled to tax incentives and
duty free import of equipment.
iii. Marine
Since its incorporation in 1976,
we have remained a substantial
shareholder of CH Offshore Ltd
(“CHO”), which has been listed on
Mainboard of the SGX-ST since 2003.
Our shareholding interest amounts to
23.71%. With more than 30 years of
experience, CHO has provided almost
every facet of offshore support
services to the oil and gas industry
worldwide, spanning from offshore oil
and gas exploration, development and
production activities. Such services
include supporting seismic surveys,
towing and anchor handling of drilling
rigs and equipment, transportation
of supplies and personnel, workover and production activities as well
as supporting pipe-laying and other
offshore construction activities.
CHO’s clients include most oil majors
and other customers situated in South
East Asia, Middle East, Americas,
Africa and Russia. It manages a
modern young fleet of 15 offshore
support vessels which are well
maintained and upgraded as required,
to remain relevant to its customers’
needs. Through its firm commitment
towards quality, reliability and
high service standards, CHO has
forged excellent relationships with
its customers. Its strong financial
position places CHO in good stead to
expand its fleet should opportunities
arise and further strengthen its global
presence.
Disciplined Investment Approach
Through our prudent approach and
active management of our exposures,
we have built a resilient and sound
portfolio that contributes to Chuan
Hup’s robust balance sheet. We
remain committed to a disciplined
selection process of our investments
to ensure that growth in long-term
value is not sacrificed for short-term
gains. Without any bank borrowings,
we have actively managed our level
of liquidity to ensure that we are
well positioned to seize investment
opportunities as and when they arise.
ANNUAL REPORT 2012
05
Board of Directors
Non-Executive,
Independent Director and Chairman
Prof. Tan Cheng Han, S.C. is a NonExecutive, Independent Director and the
Chairman of Chuan Hup. He was appointed
as a Director on 1 July 2001 and as NonExecutive Chairman on 21 October 2011.
He was last re-elected on 21 October 2011.
Prof. Tan Cheng Han, S.C. is a Professor
of Law at the National University of
Singapore (“NUS”). He was Dean of the
NUS Faculty of Law from 1 May 2001 to
31 December 2011. Prior to joining NUS in
1996, he was a Partner in the Singapore
law firm of Drew & Napier. He is currently
a Consultant at TSMP Law Corporation
and on the panel of arbitrators for the
Singapore International Arbitration Centre
and the Kuala Lumpur Regional Centre for
Arbitration. He was appointed to the rank
of Senior Counsel in 2004 and in August
2006 he was appointed a Specialist Judge.
His practice focuses principally on complex
commercial disputes and he has also been
appointed arbitrator in many cases.
Prof. Tan’s other current appointments
include being a Senate member of NUS,
Chairman of the Media Literacy Council,
a Commissioner of the Competition
Commission of Singapore, Chairman
of the Advisory Council on Move-On
and Filming Orders, a member of the
Appeal Advisory Panel to the Minister
for Finance, a member of the Military
Court of Appeal, a member of the Casino
Regulatory
Authority’s
Disciplinary
Committee, Advisor to the Singapore Tae
06
ANNUAL REPORT 2012
Mr Peh Siong Woon Terence
Kwon-do Federation, and a member of
the Singapore Youth Sports Development
Committee.
Prof. Tan holds several board directorships,
including at Singapore Technologies
Marine Limited, Anwell Technologies
Limited, NTUC Income, and Global Yellow
Pages Limited (where he is the Board’s
Deputy Chairman).
Prof. Tan obtained his Bachelor of Laws
(Honours) degree from the National
University of Singapore in 1987 and
his Master of Laws degree from the
University of Cambridge in 1990. In 2006
he was awarded the Public Administration
Medal (Silver) in Singapore’s 41st National
Day celebrations.
Chief Executive Officer
and Executive Director
Mr Peh Siong Woon Terence is the Chief
Executive Officer and Executive Director
of Chuan Hup. He was appointed on 1
November 2005. He was last re-elected
on 25 October 2010 and will be due for
re-election at the coming Annual General
Meeting (“AGM”).
Mr Peh was the Deputy Financial Controller
of Chuan Hup from July 2002 to October
2005. From July 2002 to September 2005,
he was seconded to CH Offshore Ltd
(“CHO”) as Chief Financial Officer. As Chief
Financial Officer, he oversaw the financial
affairs of CHO. From July 2000 to June
2002, Mr Peh was the Finance Manager
at Chuan Hup and was responsible for its
Mr Peh Kwee Chim
cash management, treasury functions,
account payables and banking relations.
Prior to his appointment with Chuan Hup,
he was a Finance Manager at PCI Limited
(“PCI”) and was responsible for its cash
management and treasury functions. Mr
Peh is also an Executive Director of PCI
and an Alternate Director to Mr Peh Kwee
Chim on the Board of CHO.
Mr Peh holds a degree of Bachelor of
Commerce in Marketing from Curtin
University of Technology, Australia and a
Master of Commerce in Finance degree
from the University of New South Wales,
Australia.
Mr Peh Kwee Chim
Executive Director
Mr Peh is an Executive Director of Chuan
Hup. He was one of the co-founders of
Chuan Hup in 1970 and was appointed
as Managing Director in 1984. On 1
November 2005, he resigned as Managing
Director and remained on the Board as an
Executive Director. He was last re-elected
on 25 October 2010 and will be due for
re-election at the coming AGM. He is a
member of the Nominating Committee.
Mr Peh is also the Executive Chairman of
PCI Limited and has been instrumental
in building up the PCI Group. He is also a
Director of CHO.
Mr Peh graduated from the University of
Western Australia in 1969 with a Bachelor
of Engineering (Mechanical) degree.
Mdm Joanna Young Sau Kwan
Non-Executive,
Independent Director
Mdm Joanna Young Sau Kwan is a NonExecutive, Independent Director of Chuan
Hup. She was appointed as a Director
on 21 February 2003 and was last reelected on 21 October 2011. She is also
the Chairman of the Audit Committee
and a member of the Remuneration and
Nominating Committees.
Mdm Young brings with her a wealth of
experience in accounting, auditing and
financial management. Mdm Young is
the senior partner of her accounting firm.
From 1969 to 1978, she gained extensive
experience in the accounting profession
during her employment with Evan Wong &
Co and Turquand Youngs & Co. In 1978, she
joined a garment manufacturing company
taking charge of financial, administration
and production duties before setting up
her own practice in 1980. Mdm Young has
been the Honorary Auditor of the Chinese
Women’s Association since 1972.
Mdm Young is also a Non-Executive,
Independent Director of CHO. She is the
Chairman of its Audit and Nominating
Committees and a member of its
Remuneration Committee.
Mdm Young studied Accountancy in
Sydney Technical College and obtained
Mr Lim Kwee Siah
her Accountancy Certificate in 1968.
She was admitted to membership of the
Australian Society of Accountants and the
Singapore Society of Accountants in 1969.
She is a Fellow (Practising) Member of the
Institute of Certified Public Accountants
of Singapore and a Fellow Member of
CPA Australia. Mdm Young was admitted
as an Accredited Tax Practitioner of the
Singapore Institute of Accredited Tax
Professionals in 2010.
Mr Lim Kwee Siah
Non-Executive Director
Mr Lim Kwee Siah is a Non-Executive
Director of Chuan Hup. He was appointed
to this position on 28 December 2011 and
will be due for re-election at the coming
AGM. Mr Lim is a member of the Audit
and Remuneration Committees.
Mr Lim was also a Non-Executive Director
of PCI from August 1989 to December
2011, an Executive Director of Chuan Hup
from November 1989 to October 2005 and
a Non-Executive, Independent Director of
Scomi Marine Bhd from September 2005
to January 2011.
Mr Lim graduated from the then University
of Singapore in 1976 with a Bachelor
of Accountancy degree and is a Fellow
Member of the Institute of Certified Public
Accountants of Singapore.
ANNUAL REPORT 2012
07
Key Management
Ms Valerie Tan May Wei
Head- Legal and Corporate Secretarial
& Group Company Secretary
Ms Liew Ngin Moi
Head- Finance and Administration
Ms Teng Yuun Yean
Head- Risk Management
Ms Valerie Tan May Wei joined Chuan Hup
on 15 July 1993 as Group Legal Manager
and was appointed Group Company
Secretary on 18 January 1994. She is
responsible for all legal and secretarial
matters of the Chuan Hup Group.
Ms Liew Ngin Moi joined Chuan Hup on 3
March 2008 as a Management Trainee and
was appointed Senior Finance Manager on
28 September 2008. She is responsible
for all accounting, financial and taxation
matters of the Chuan Hup Group.
Ms Teng Yuun Yean joined Chuan Hup on 1
July 2010. She is responsible for monitoring
the Group’s financial risk exposure within
its financial risk management framework,
as well as other risk management and
audit related projects.
Prior to joining Chuan Hup, Ms Tan was
Group Legal Manager and Company
Secretary of Jurong Shipyard Ltd. She was
Senior Legal Officer at Neptune Orient
Lines Ltd prior to that. She has over 20
years of experience in legal and corporate
secretarial matters.
Ms Liew was an accountant with CHO
before joining Chuan Hup. Prior to that,
she was an accountant with Medtronic
International Ltd and Kao (Singapore)
Pte Ltd. Ms Liew has over 15 years of
experience in the accounting profession.
Ms Teng commenced her career in 1994
as an auditor with Foo Kon Tan Grant
Thornton LLP. In 1997, she joined Ernst &
Young, Assurance and Advisory Business
Services team in Perth, and became a
management consultant in Ernst & Young,
Management
Consulting
(Business
Process Re-engineering). She gained
extensive experience in external, internal
and joint venture audits of governmental
entities, public listed and private
companies in the resources, oil & gas,
hospitality, health care and manufacturing
industries, in addition to management
consulting projects involving government
and non-profit organisations. Prior to
joining Chuan Hup, Ms Teng was Vice
President, Finance in The Straits Trading
Company Limited group of companies.
From 2000 to 2009, she was responsible
for all areas of management, financial
and statutory reporting and tax matters,
in relation to the group’s hospitality and
media business units and its Australian
property investments.
Ms Tan is also the Company Secretary
of CH Offshore Ltd (“CHO”) and the
Company Secretary of PCI Limited.
Ms Tan graduated from the National
University of Singapore in 1987 with a
Bachelor of Laws (Honours) degree.
Ms Liew graduated from the Murdoch
University, Western Australia in 1996 with
a Bachelor of Commerce degree, majoring
in Accounting and Finance. She was
admitted to membership of CPA Australia
in 1998 and the Institute of Certified Public
Accountants of Singapore (Non-Practising)
in 2010.
Ms Teng graduated with a Bachelor of
Commerce degree from the University of
Western Australia, where she majored in
Accounting, Finance and Management.
She is a Fellow Member of CPA Australia.
08
ANNUAL REPORT 2012
Corporate Data and Financial Calendar
Board of Directors
Company Secretary
Ms Valerie Tan May Wei
(Non-Executive, Independent Director and Chairman)
Registered Office
(Chief Executive Officer and Executive Director)
390 Jalan Ahmad Ibrahim
Singapore 629155
Telephone: (65) 6559 9700
Facsimile: (65) 6268 1937
Website: www.chuanhup.com.sg
Email: corpsec_legal@chuanhup.com.sg
Mr Peh Kwee Chim
(Executive Director)
(Non-Executive, Independent Director)
Mr Lim Kwee Siah
(Non-Executive Director)
Audit Committee
(Chairman)
Share Registrar
Tricor Barbinder Share Registration Services
(A division of Tricor Singapore Pte. Ltd.)
80 Robinson Road
#02-00 Singapore 068898
Mr Lim Kwee Siah
Auditors
Remuneration Committee
Ernst & Young LLP
One Raffles Quay
North Tower, Level 18
Singapore 048583
(Chairman)
Mr Lim Kwee Siah
Nominating Committee
Partner-in-Charge: Mr Adrian Koh
Appointed with effect from the financial year
ended 30 June 2010
(Chairman)
Mr Peh Kwee Chim
Financial Year End
30 June 2012
Announcement of First Quarter Financial Results
11 November 2011
Announcement of Half-Year Financial Results
10 February 2012
Announcement of Third Quarter Financial Results
11 May 2012
Announcement of Full-Year Financial Results
10 August 2012
Dispatch of Annual Report to Shareholders
5 October 2012
Annual General Meeting
25 October 2012
Book Closure to Register Members for Dividend Payment
8 November 2012
Proposed Payment of First and Final Dividend
23 November 2012
ANNUAL REPORT 2012
09
2012
US$’000
2011
US$’000
2010
US$’000
2009
US$’000
2008
US$’000
10,048
234,504
4,576
337
249,465
9,700
42,534
950
227
53,411
6,628
106,690
726
114,044
4,469
3,762
8,231
21,710
3,880
25,590
38,199
6,919
748
(50)
45,816
49,459
1,201
200
(629)
50,231
1,863
11,290
(744)
12,409
(63,610)
(803)
(64,413)
14,957
4,883
19,840
44,459
49,911
9,629
(66,333)
19,482
45,680
16,340
53,090
61,138
667
50,447
18,111
117,319
527
38,522
154,522
1
39,336
145,610
-
6,413
237,331
5,512
81,606
36,795
29,964
43,530
368,810
78,556
38,775
29,168
37,633
370,536
28,477
21,569
2,773
245,864
29,694
18,211
14,956
247,807
14,796
19,624
20,668
304,344
63,856
406
281,920
22,628
368,810
62,916
491
284,277
22,852
370,536
11,792
234,069
3
28,956
218,848
3
12,357
291,662
325
245,864
247,807
304,344
Per Ordinary Share
Net tangible assets per share (US cents)
Earnings per share (US cents)
Dividend per share (SG cents)
30.20
4.76
1.00
30.45
5.35
1.00
25.06
1.00
-
21.78
(6.60)
-
28.90
1.85
1.00
Financial Ratios
Dividend payout ratio (%)
Return on total assets (%)
Return on average equity (%)
16.52
12.05
15.70
15.02
13.47
19.26
3.92
4.25
(26.77)
(25.99)
38.38
6.40
6.01
Financial year ended 30 June
INCOME STATEMENT
Revenue
Investment holding
Electronics manufacturing services
Property development and management
Vessel management
Profit/(Loss) Before Tax
Investment holding
Electronics manufacturing services
Property development and management
Vessel management
Profit/(Loss) Attributable To Equity Holders of the Company
BALANCE SHEET Non-current assets
Property, plant and equipment
Investment property (prepaid lease payment)
Associates
Investment securities
Other non-current assets
Current assets
Cash and bank balances
Inventories
Other current assets
Total Assets
Current liabilities
Non-current liabilities
Equity attributable to equity holders of the Company
Non-controlling interests
Total Equity and Liabilities
10
ANNUAL REPORT 2012
Profit attributable to shareholders (US$ million)
5.35
49.9
2008
44.5
1.85
19.5
1.00
9.6
2009
2010
2011
4.76
2012
2008
2009
2010
2011
2012
(66.3)
(6.60)
Shareholders’ equity (US$ million)
Dividend per share (SG cents)
291.7
284.3
218.8
281.9
234.1
1.00
-
2008
2009
2010
2011
2012
Return on average equity (%)
2008
2009
6.01
2008
1.00
2011
2012
-
2010
Net tangible assets per share (US cents)
28.90
19.26
1.00
30.45
30.20
2011
2012
25.06
21.78
15.70
4.25
2009
2010
2011
2012
2008
2009
2010
(25.99)
ANNUAL REPORT 2012
11
Chuan Hup is committed to achieving high standards of corporate governance to ensure greater transparency and
maximise long-term shareholder value.
This report describes Chuan Hup’s corporate governance practices for the financial year ended 30 June 2012 with reference
to the Singapore Code of Corporate Governance 2005 (the “Code”).
BOARD MATTERS
The Board’s Conduct of its Affairs
(Principle 1)
The Board oversees the business affairs of Chuan Hup and therefore every director is expected to act in good faith
and always in the interests of the Company. The principal functions of the Board include the approval of the Company’s
strategic plans, the approval of major investments, divestments and fund-raising, overseeing processes for evaluating
the adequacy of internal controls and risk management and being responsible for corporate governance practices. Chuan
Hup has in place financial authorisation and approval limits for operating and capital expenditure, as well as acquisitions
and disposal of investments. The Board and the Audit Committee also approve the Chuan Hup Group’s financial results.
The Board meets on a regular basis. Where necessary, additional Board meetings are held to deliberate on urgent
substantive matters. An aggregate of 6 Board meetings were held for the financial year ended 30 June 2012. Details of
the attendance of Board members at Board meetings and meetings of the various Board Committees for the financial year
ended 30 June 2012 are set out on page 20 of this Annual Report.
All new Directors appointed to the Board are briefed on the business activities of the Group and its strategic directions,
as well as their statutory and other duties and responsibilities as Directors. In addition, Directors are briefed either during
Board meetings or at specially convened sessions on changes to regulations and accounting standards which have an
important bearing on the Company’s or Directors’ disclosure obligations. Where appropriate, Directors are encouraged to
attend courses, conferences and seminars in relevant fields.
Board Composition and Guidance
(Principle 2)
The Board currently comprises 5 Directors, 2 of whom are Non-Executive, Independent Directors. The Non-Executive,
Independent Directors are Prof. Tan Cheng Han, S.C. and Mdm Joanna Young Sau Kwan.
The Nominating Committee reviews the independence of each director annually bearing in mind the Code’s definition
of what constitutes an independent director. Under the Code, Prof. Tan Cheng Han, S.C. would be deemed to be not
independent because his spouse, Ms Valerie Tan May Wei, is the Head - Legal and Corporate Secretarial and Group
Company Secretary. However, Ms Tan reports to the Chief Executive Officer and Prof. Tan abstains from discussions and
decisions relating to her remuneration, and hence Prof. Tan is considered to be an Independent Director. In any event, the
Board considers Prof. Tan to be an Independent Director because he is a strong-minded individual who is able to exercise
independent judgement with a view to the best interests of the Company at all times in the discharge of his duties as
Director.
12
ANNUAL REPORT 2012
The Directors bring with them a broad range of expertise and experience in areas such as accounting and finance, law,
business and management and industry knowledge. The diversity of the Directors’ experience allows for the useful
exchange of ideas and views. Profiles of the Directors and other relevant information are set out on pages 6 and 7 of this
Annual Report.
Chairman and Chief Executive Officer
(Principle 3)
Different individuals assume the Chairman and the Chief Executive Officer functions in Chuan Hup. There is a clear
separation of the roles and responsibilities between the Chairman and the Chief Executive Officer. The Chairman chairs the
Board meetings and guides the Board on its discussions on significant issues. The Chief Executive Officer is responsible
for the day-to-day management of the business and the overall performance of the Group. The Chairman and the Chief
Executive Officer are not related.
Board Membership
(Principle 4)
The Nominating Committee comprises Prof. Tan Cheng Han, S.C (Committee Chairman), Mr Peh Kwee Chim and Mdm
Joanna Young Sau Kwan, the majority of whom including the Chairman, are Non-Executive, Independent Directors.
The Nominating Committee reviews and assesses candidates for directorships before making recommendations to the
Board. In recommending new directors to the Board, the Nominating Committee takes into consideration the skills and
experience required and the current composition of the Board, and strives to ensure that the Board has an appropriate
balance of independent directors as well as directors with the right profile of expertise, skills, attributes and ability.
In evaluating a director’s contribution and performance for the purpose of re-nomination, the Nominating Committee takes
into consideration a variety of factors such as attendance, preparedness, participation and candour.
Recommendations for appointments of directors and the members of the various Board Committee are made by the
Nominating Committee and considered by the Board as a whole. At each Annual General Meeting (“AGM”) of Chuan Hup,
not less than one third of the directors for the time being (being those who have been longest in office since their last
re-election) are required to retire from office by rotation. A retiring director is eligible for re-election by the shareholders of
Chuan Hup at the AGM. All newly appointed directors during the year will hold office only until the next AGM and will be
eligible for re-election. Director above 70 years of age are subject to annual re-appointment.
Board Performance
(Principle 5)
The Board should ensure compliance with applicable laws and Board members should act in good faith, with due diligence
and care in the best interests of Chuan Hup and its shareholders. In addition to these fiduciary duties, the Board is charged
with two key responsibilities: setting strategic directions and ensuring that Chuan Hup is ably led. The measure of a
board’s performance is also tested through its ability to lend support to management especially in times of crisis and to
steer the company in the right direction.
ANNUAL REPORT 2012
13
Chuan Hup is of the opinion that the financial indicators set out in the Code as guides for the evaluation of directors are
more of a measure of Management’s performance and hence are less applicable to Directors. In any case, such financial
indicators provide a snapshot of a company’s performance, and do not fully measure the sustainable long-term wealth and
value creation of Chuan Hup.
The Board through the delegation of its authority to the Nominating Committee, has used its best efforts to ensure that
directors appointed to the Board possess the background, experience, knowledge and skills critical to the Company’s
business and that each director with his special contributions brings to the Board an independent and objective perspective
to enable balanced and well-considered decisions to be made.
Access to Information
(Principle 6)
Prior to each Board meeting, the Board is supplied with relevant information by the Management pertaining to matters
to be brought before the Board for decision as well as ongoing reports relating to operational and financial performance
of the Group. The Board has separate and independent access to Senior Management and the Company Secretary at all
times. The Board also has access to independent professional advice, where appropriate, at the expense of Chuan Hup.
REMUNERATION MATTERS
(Principles 7, 8 and 9)
The Remuneration Committee comprises Prof. Tan Cheng Han, S.C. (Committee Chairman), Mdm Joanna Young Sau
Kwan and Mr Lim Kwee Siah, all of whom are Non-Executive and the majority of whom, including the Chairman, are
Independent Directors. The role of the Remuneration Committee is to review and approve the remuneration, including
director’s fee, salaries, allowances, bonuses and benefits in kind to the Directors and Senior Management of Chuan Hup.
The Remuneration Committee in establishing the framework of remuneration policies for its Directors and Senior
Executives is largely guided by the financial performance of the Company. The primary objective is to align the interest
of Management with that of the shareholders. In this respect, it believes that remuneration should be competitive and
sufficient to attract, retain and motivate Executive Directors and Senior Executives to manage the Company well. Pay
levels, benefits and incentives are structured to focus them to achieve corporate objectives.
The remuneration package generally comprises two components. One component is fixed in the form of the base salary.
The other component is variable consisting of AWS and performance bonuses. The variable portion is largely dependent
on the financial performance of the Company. The Remuneration Committee strongly supports and endorses the flexible
wage system because it gives the Company more flexibility to ride through economic downturns. The Remuneration
Committee has adopted set profitability levels to be achieved before performance bonuses are payable.
14
ANNUAL REPORT 2012
All Non-Executive Directors are paid Directors’ fees which are subject to approval at AGMs. The Non-Executive Chairman
of the Board is paid more than the other Non-Executive Directors due to the nature of his position.
The Directors’ remuneration in bands of US$200,000 is disclosed below. The remuneration of the top three key executives
in the Group who are not also Directors of the Company is shown in bands of US$200,000. Their actual remuneration has
not been disclosed for competitive reasons and to maintain confidentiality of staff remuneration matters.
REMUNERATION PAID OR ACCRUED TO CHUAN HUP DIRECTORS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Fixed
Component(1)
(%)
Variable
Component(2)
(%)
Directors’
Fees
(%)
Total
Compensation
(%)
Mr Peh Kwee Chim
44
56
-
100
40
60
-
100
Dr Tan Cheng Bock(3)
-
-
100
100
-
-
100
100
-
-
100
100
Mr Lim Kwee Siah
-
-
100
100
Directors of Company
US$600,000 to US$799,999
Below US$200,000
(4)
Notes:
1.
Fixed component refers to base salary earned, transport allowance and employer CPF.
2.
Variable component refers to AWS, variable bonus and employer CPF.
3.
Dr Tan Cheng Bock retired as Director following the conclusion of the AGM held on 21 October 2011.
4.
Mr Lim Kwee Siah was appointed as Director on 28 December 2011.
ANNUAL REPORT 2012
15
REMUNERATION PAID OR ACCRUED TO THE TOP THREE KEY EXECUTIVES
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Fixed
Component(1)
(%)
Variable
Component(2)
Total
Compensation
(%)
(%)
Liew Ngin Moi
52
48
100
Teng Yuun Yean
50
50
100
Valerie Tan May Wei
56
44
100
Key Executives of Company
US$200,000 to US$399,999
Notes:
1.
Fixed component refers to base salary earned, transport allowance and employer CPF.
2. Variable component refers to AWS, variable bonus and employer CPF.
ACCOUNTABILITY AND AUDIT
Accountability
(Principle 10)
The Board through its announcements of quarterly and full-year results, aims to provide shareholders with a balanced and
understandable assessment of the Company’s performance and prospects.
Chuan Hup recognises the importance of providing the Board with a continual flow of relevant information on an accurate
and timely basis in order that it may effectively discharge its duties. On a regular basis, Board members are provided with
business and financial reports comparing actual performance with budget with highlights on key business indicators and
major issues.
16
ANNUAL REPORT 2012
Audit Committee
(Principle 11)
The Audit Committee comprises Mdm Joanna Young Sau Kwan (Committee Chairman), Prof. Tan Cheng Han, S.C. and
Mr Lim Kwee Siah, all of whom are Non-Executive, and the majority of whom, including the Chairman, are Independent.
Mdm Joanna Young Sau Kwan and Mr Lim Kwee Siah have accounting and related financial management expertise and
experience. The Board considers Prof. Tan Chen Han, S.C. as having sufficient financial knowledge and experience to
discharge his responsibility as a member of the Committee.
The Audit Committee meets at least four times a year. The Audit Committee’s duties include:
(a) reviewing the quarterly and annual financial statements and financial announcements required by SGX-ST for
recommendation to the Board for approval;
(b) discussing with the external auditor the audit plan, and the report on the audit of the year-end financial statements;
reviewing the external auditor’s management letter and Management’s response thereto; reviewing the external
auditors’ objectivity and independence from Management and the Company; reviewing the fees and expenses paid
to the external auditor, including fees paid for non-audit services during the year; considering the appointment of the
external auditor and the audit fee; making recommendations to the Board on the selection of the Company’s external
auditor;
(c) reviewing the scope of internal audit work and its audit programmes; reviewing the major findings during the year and
Management’s response thereto; and ensuring the adequacy of the independence and resource sufficiency of the
internal audit function;
(d) reviewing the effectiveness of the Group’s material controls, including financial compliance and risk management
controls, to safeguard shareholders’ investments and the Group’s assets; and
(e) reviewing interested person transactions to ensure compliance with the SGX-ST Listing Manual.
The Audit Committee has explicit authority to investigate any matter within its terms of reference. It has full access to, and
the co-operation of Management and full discretion to invite any Director or executive officer to attend its meetings. The
Audit Committee has been given adequate resources to enable it to discharge its functions. The Audit Committee meets
with the internal and external auditors without the presence of non-audit Management, at least annually.
ANNUAL REPORT 2012
17
Some of the Company’s subsidiaries and its significant associated company, CH Offshore Ltd, are audited by different
auditors. The names of these auditors are listed on pages 63 and 66 of the Annual Report. The Board and the Audit
Committee are satisfied that the appointment of these auditors would not compromise the standard and effectiveness
of the audit of the Group. Accordingly, the Board confirms that Rule 712 and Rule 716 of the SGX-ST Listing Manual have
been complied with.
Whistleblowing Policy
The Company has implemented a whistleblowing policy, which serves to encourage and provide a channel to employees
to report in good faith and in confidence, without fear of reprisals, concerns about possible wrongdoing or breach of
applicable laws, regulations, policies or other matters. The objectives for such arrangement is to ensure independent
investigation of such matters and for appropriate follow-up action.
Interested Person Transactions Policy
The Company has procedures in place to comply with the SGX-ST Listing Manual requirements relating to interested
person transactions (“IPTs”) of the Company. There were no IPTs in the financial year ended 30 June 2012, for which
disclosure is required under Rule 907 of the SGX-ST Listing Manual.
Internal Controls and Internal Audit
(Principles 12 and 13)
Internal and external auditors conduct regular reviews of the system of internal controls and significant internal control
weaknesses are brought to the attention of the Audit Committee and to Management for remedial action.
The Company has established an in-house internal audit function that is independent of the activities it audits. The Internal
Auditor reports primarily to the Chairman of the Audit Committee and administratively to the Chief Executive Officer.
The Internal Auditor meets the standards set by recognised professional bodies. The Audit Committee has reviewed the
adequacy of the internal audit function and is safisfied that the Company’s internal audit function is adequately resourced.
Risk management is essential to the Company’s business. The Company has established risk management policies,
guidelines and control procedures to identify financial, operational and compliance risks and monitor and manage these
risks.
Chuan Hup has implemented a Group insurance program and has in place a system for financial monitoring and control.
Based on the internal controls established and maintained by the Group, work performed by the internal and external
auditors, and reviews performed by Management and various Board Committees, the Board, with the concurrence of
18
ANNUAL REPORT 2012
the Audit Committee, is of the opinion that the Group’s internal controls were adequate as at 30 June 2012 to address
financial, operational and compliance risks, which the Group considers relevant and material to its operations.
The Board notes that the system of internal controls provides reasonable, but not absolute, assurance that the Group
will not be affected by any event that could be reasonably foreseen as it strives to achieve its business objectives. In this
regard, the Board also notes that no system can provide absolute assurance against the occurrence of material errors,
poor judgement in decision-making, human error, fraud or other irregularities.
COMMUNICATION WITH SHAREHOLDERS
(Principles 14 and 15)
Chuan Hup believes in regular and timely communication with investors. The Company is open to meetings with investors
and analysts.
Chuan Hup’s website serves as a comprehensive and easy-to-use source of information for shareholders. It contains the
Company’s publicly disclosed financial information, annual reports and announcements.
Chuan Hup is in full support of the Code’s principle to encourage shareholder participation. Chuan Hup’s Articles of
Association allow a member entitled to attend and vote to appoint a proxy to attend and vote instead of the member and
also provide that a proxy need not be a member of Chuan Hup. Voting in absentia by mail, facsimile or email is currently
not permitted to ensure proper authentication of the identity of shareholders and their voting intent.
Board members always endeavour to attend general meetings to address questions by shareholders. Management as
well as the external auditor are present at AGMs to assist the Board in addressing queries from shareholders.
SECURITIES DEALING
The Company has adopted the SGX-ST Best Practices Guide with respect to the dealings in securities for the guidance
of directors and officers. Chuan Hup’s directors and officers are prohibited from dealing in Chuan Hup’s shares for the
period of two weeks prior to the announcement of quarterly results and a period of one month prior to the announcement
of year-end results. In addition, directors and officers are prohibited from dealing in Chuan Hup’s shares on short-term
considerations or if they are in possession of unpublished price-sensitive information on the Group.
CONCLUSION
Chuan Hup recognises the importance of good corporate governance practices for maintaining and promoting investor
confidence. Chuan Hup will continue to review and improve its corporate governance practices on an ongoing basis.
ANNUAL REPORT 2012
19
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
The attendance of each Director at Board meetings and Board Committee meetings during the financial year ended 30
June 2012 is as follows:
Board Meetings
Directors
No. of Meetings Held
No. of Meetings Attended
2
1
6
6
Mr Peh Kwee Chim
6
6
6
6
6
6
Mr Lim Kwee Siah(2)
3
3
Board Committee Meetings
Remuneration
Committee
Audit
Committee
Nominating
Committee
No. of
meetings
held
No. of
meetings
attended
No. of
meetings
held
No. of
meetings
attended
No. of
meetings
held
No. of
meetings
attended
1
-
1
1
-
-
4
4
1
1
1
1
Mr Peh Kwee Chim
-
-
-
-
1
1
4
4
1
1
1
1
Mr Lim Kwee Siah
2
2
-
-
-
-
Directors
(2)
Notes:
(1) Dr Tan Cheng Bock retired as Non-Executive Chairman, Chairman of the Nominating Committee and a member of the Audit and Remuneration Committees following the conclusion of the AGM held on 21 October 2011.
(2) Mr Lim Kwee Siah was appointed as a Non-Executive Director and a member of the Audit and Remuneration Committees on 28 December 2011.
20
ANNUAL REPORT 2012
Financial Statements
Directors’ Report
22
Statement by Directors
25
Independent Auditor’s Report
26
Statements of Comprehensive Income
27
Balance Sheets
28
Statements of Changes in Equity
29
Consolidated Cash Flow Statement
32
Notes to the Financial Statements
34
DIRECTORS’ REPORT
The directors are pleased to present their report to the members together with the audited consolidated financial
statements of Chuan Hup Holdings Limited (the “Company”) and its subsidiaries (collectively, the “Group”) and the
statement of comprehensive income, balance sheet and statement of changes in equity of the Company for the
financial year ended 30 June 2012.
1.
Directors
The directors of the Company in office at the date of this report are :
Mr Peh Kwee Chim
Mr Lim Kwee Siah (appointed on 28 December 2011)
2.
Arrangements to enable directors to acquire shares and debentures
Except as disclosed in this report, neither at the end of nor at any time during the financial year was the
Company a party to any arrangement whose objects are, or one of whose objects is, to enable a director of the
Company to acquire benefits by means of the acquisition of shares or debentures of the Company or any other
body corporate.
3.
Directors’ interests in shares and debentures
The following directors, who held office at the end of the financial year, had, according to the register of
directors’ shareholdings required to be kept under Section 164 of the Singapore Companies Act, Cap. 50,
interests in shares of the Company and related corporations (other than wholly-owned subsidiaries) as stated
below :
Name of Director
Chuan Hup Holdings Limited
(ordinary shares)
Mr Peh Kwee Chim
Mr Lim Kwee Siah
Direct interest
At 1.7.2011
or date of
appointment,
if later
At 30.6.2012
Deemed interest
At 1.7.2011
or date of
appointment,
if later
At 30.6.2012
478,264,490
22,500
230,000
474,572,490
22,500
230,000
−
−
−
−
−
−
−
40,000
−
40,000
151,476,506**
−
149,547,506**
−
PCI Limited
(ordinary shares)
Mr Peh Kwee Chim
**
22
Mr Peh Kwee Chim has a deemed interest by virtue of Section 7(4) of the Singapore Companies Act, Cap. 50.
ANNUAL REPORT 2012
DIRECTORS’ REPORT
3.
Directors’ interests in shares and debentures (cont’d)
Except as disclosed in this report, no director who held office at the end of the financial year had interests
in shares, share options, warrants or debentures of the Company, or of related corporations, either at the
beginning of the financial year, or date of appointment if later, or at the end of the financial year.
By virtue of Section 7 of the Singapore Companies Act, Cap. 50, Mr Peh Kwee Chim is deemed to have an
interest in all the related corporations of the Company.
The directors’ interests in the shares of the Company as at 21 July 2012 were the same as at 30 June 2012.
4.
Directors’ contractual benefits
Since the end of the previous financial year, no director has received or become entitled to receive a benefit
(other than as disclosed in the financial statements or in this report) by reason of a contract made by the
Company or a related corporation with the director, or with a firm of which the director is a member or with a
company in which the director has a substantial financial interest.
5.
Share options of a subsidiary
At the end of the financial year, there were 235,000 unissued shares of PCI Limited under option relating to
the PCI Limited Employees’ Share Option Scheme 2003. Details and terms of the share options have been
disclosed in the directors’ report of PCI Limited for the financial year ended 30 June 2012.
6.
Audit committee
The Audit Committee carried out its functions in accordance with Section 201B(5) of the Singapore Companies
Act, Cap. 50 and the Singapore Exchange Securities Trading Limited Listing Manual. The functions carried out
are detailed in the Corporate Governance Report, which is included in the Company’s Annual Report for the
financial year ended 30 June 2012.
The Audit Committee has full access to and has the co-operation of the management and has been given the
resources required for it to discharge its functions properly. It also has full discretion to invite any director and
executive officer to attend its meetings. The external and internal auditors have unrestricted access to the Audit
Committee.
The Audit Committee, having reviewed all non-audit services provided by the external auditor to the Group, is
satisfied that the nature and extent of such services would not affect the independence of the external auditor.
The Audit Committee has also conducted a review of interested person transactions.
ANNUAL REPORT 2012
23
DIRECTORS’ REPORT
7.
Auditor
Ernst & Young LLP have expressed their willingness to accept re-appointment as auditor.
On behalf of the board of directors,
Peh Siong Woon Terence
Director
Peh Kwee Chim
Director
Singapore
31 August 2012
24
ANNUAL REPORT 2012
STATEMENT BY DIRECTORS
We, Peh Siong Woon Terence and Peh Kwee Chim, being two of the directors of Chuan Hup Holdings Limited, do
hereby state that, in the opinion of the directors :
(i)
the accompanying statements of comprehensive income, balance sheets, statements of changes in equity and
consolidated cash flow statement together with notes thereto are drawn up so as to give a true and fair view
of the state of affairs of the Group and of the Company as at 30 June 2012 and the results of the business,
changes in equity of the Group and of the Company and cash flows of the Group for the financial year ended on
that date; and
(ii)
at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they fall due.
On behalf of the board of directors,
Peh Siong Woon Terence
Director
Peh Kwee Chim
Director
Singapore
31 August 2012
ANNUAL REPORT 2012
25
INDEPENDENT AUDITOR’S REPORT
for the financial year ended 30 June 2012
To The Members of Chuan Hup Holdings Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Chuan Hup Holdings Limited (the “Company”) and
its subsidiaries (collectively, the “Group”) set out on pages 27 to 89, which comprise the consolidated balance
sheet of the Group and the balance sheet of the Company as at 30 June 2012, the consolidated statement of
comprehensive income, statement of changes in equity and statement of cash flows of the Group and the statement
of comprehensive income and statement of changes in equity of the Company for the financial year then ended, and a
summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with
the provisions of the Singapore Companies Act, Cap. 50 (the “Act”) and Singapore Financial Reporting Standards, and
for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that
assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised
and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance
sheets and to maintain accountability of assets.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entity’s preparation of the financial statements that give a true
and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the consolidated financial statements of the Group and the statement of comprehensive income,
balance sheet and statement of changes in equity of the Company are properly drawn up in accordance with the
provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of
affairs of the Group and the Company as at 30 June 2012 and the results and changes in equity of the Group and the
Company and the cash flows of the Group for the financial year ended on that date.
Report on Other Legal and Regulatory Requirements
In our opinion, the accounting and other records required by the Act to be kept by the Company and by those
subsidiaries incorporated in Singapore of which we are the auditor have been properly kept in accordance with the
provisions of the Act.
Ernst & Young LLP
Public Accountants and
Certified Public Accountants
Singapore
31 August 2012
26
ANNUAL REPORT 2012
STATEMENTS OF COMPREHENSIVE INCOME
Group
Company
2012
2011
US$’000
US$’000
Note
2012
US$’000
2011
US$’000
4
249,465
(187,086)
(25,663)
(1,780)
(3,317)
(62)
(41)
53,411
(34,623)
(4,531)
(274)
(568)
(144)
(271)
14,327
−
−
−
−
−
−
17,481
−
−
−
−
−
−
(65)
(2,908)
(367)
1,374
(583)
(910)
(553)
(305)
−
(5,708)
(807)
(1,409)
48,973
−
(434)
(2,240)
(10)
(1,301)
34,642
−
−
(4,221)
(16)
(529)
20,483
−
Revenue
Raw material and consumables
Manufacturing expenses
Business development expenses
Other operating expenses
Property development expense
Vessel management expense
Change in fair value of other financial
assets at fair value through profit or loss
Impairment loss on available-for-sale
investments
Impairment loss on investments in
subsidiaries
Employee benefits expense
Depreciation expense
Other expenses
Other gains, net
Share of results of an associate
5
12
−
(10,098)
(3,741)
(4,093)
26,471
6,409
Profit before tax
Income tax benefit/(expense)
5
6
45,816
719
50,231
11
44,064
(5)
34,267
(189)
46,535
50,242
44,059
34,078
(36,816)
14,967
(46,392)
897
175
(3,901)
(36)
(2,981)
500
(16,000)
−
8,772
175
22
−
−
305
(9,903)
−
−
(43,559)
8,239
(46,195)
(8,701)
2,976
58,481
(2,136)
25,377
44,459
2,076
46,535
49,911
331
50,242
1,095
1,881
2,976
58,150
331
58,481
4.76
4.76
5.35
5.35
5
Profit after tax
Other comprehensive (loss)/income
(Decrease)/increase in fair value of availablefor-sale investments
Impairment loss on available-for-sale
investments
Reversal on sale of available-for-sale investments
Share of other comprehensive loss of associate
Foreign currency translation
Other comprehensive (loss)/income for
the year, net of tax
Total comprehensive income/(loss)
for the year
Profit attributable to :
Equity holders of the Company
Total comprehensive income attributable to :
Equity holders of the Company
Earnings per share (cents) :
Basic
Fully diluted
7
The accompanying accounting policies and explanatory information form an integral part of the financial statements.
ANNUAL REPORT 2012
27
BALANCE SHEETS
as at 30 June 2012
Group
Assets
Non-current assets
Subsidiaries
Associates
Deferred tax assets
Other assets
Current assets
Inventories
Trade receivables
Other receivables and prepayments
Amounts due from subsidiaries
Tax recoverable
Derivative financial instruments
Note
2012
US$’000
2011
US$’000
Company
2012
2011
US$’000
US$’000
9
10
11
12
13
14
15
45,680
16,340
−
53,090
61,138
352
315
176,915
50,447
18,111
−
−
117,319
212
315
186,404
16
−
57,361
47,715
48,937
−
−
154,029
22
−
57,066
−
99,219
−
−
156,307
21
17
18
19
36,795
40,641
2,846
−
−
29,964
43
81,606
191,895
368,810
38,775
34,915
2,706
−
12
29,168
−
78,556
184,132
370,536
−
15
39
56,813
−
4,939
−
9,665
71,471
225,500
−
−
36
35,448
−
21,713
−
15,464
72,661
228,968
37,088
22,903
−
3,427
438
63,856
29,303
28,304
−
5,309
−
62,916
−
5,894
9,676
209
102
15,881
−
7,028
6,335
209
−
13,572
13
20
16
Total assets
Equity and liabilities
Current liabilities
Trade payables
Other payables
Amounts due to subsidiaries
Income tax payable
Derivative financial instruments
22
23
24
Non-current liabilities
Deferred tax liabilities
Total liabilities
14
406
64,262
491
63,407
−
15,881
−
13,572
25
26
152,009
31,975
97,936
152,009
75,150
57,118
152,009
21,422
36,188
152,009
67,617
(4,230)
281,920
22,628
304,548
284,277
22,852
307,129
209,619
−
209,619
215,396
−
215,396
368,810
370,536
225,500
228,968
Equity
Share capital
Reserves
Accumulated profits/(losses)
Equity attributable to equity holders of
the Company
Total equity
Total equity and liabilities
20
28
ANNUAL REPORT 2012
STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
Foreign
Accumulated
currency Investment
profits/
translation revaluation Capital
(losses)
reserve
reserve
reserve
US$’000
US$’000
US$’000
US$’000
Noncontrolling
interests
US$’000
Total
equity
US$’000
Group
Share
capital
US$’000
Balance at 1 July 2011
152,009
13,479
61,671
−
57,118
284,277
22,852
307,129
Profit for the year
Decrease in fair value
of available-for-sale
investments
Impairment loss
on available-for-sale
investments
Reversal on sale
investments
Share of other
comprehensive loss of
an associate
Foreign currency
translation
Other comprehensive
loss, net of tax
Total comprehensive
income/(loss) for
the year
−
−
−
−
44,459
44,459
2,076
46,535
−
−
(36,816)
−
−
(36,816)
−
(36,816)
−
−
175
−
−
175
−
175
−
−
(3,901)
−
−
(3,901)
−
(3,901)
−
−
(36)
−
−
(36)
−
(36)
−
(2,786)
−
−
−
(2,786)
(195)
(2,981)
−
(2,786)
(40,578)
−
−
(43,364)
(195)
(43,559)
−
(2,786)
(40,578)
−
44,459
1,095
1,881
2,976
−
−
−
189
−
189
(918)
(729)
−
−
−
−
(3,641)
(3,641)
−
(3,641)
−
−
−
−
−
−
(1,187)
(1,187)
152,009
10,693
21,093
189
97,936
281,920
22,628
304,548
Acquisition of noncontrolling interests
of subsidiary without a
change in control
Dividends paid to equity
holders of the
Company (Note 8)
Dividends paid to noncontrolling interests of
subsidiary
Balance at 30 June
2012
Total
US$’000
ANNUAL REPORT 2012
29
STATEMENTS OF CHANGES IN EQUITY (CONT’D)
Group
Share
capital
US$’000
Attributable to equity holders of the Company
Foreign
Accumulated
currency Investment
profits/
translation revaluation Capital
(losses)
reserve
reserve
reserve
US$’000
US$’000
US$’000
US$’000
Total
US$’000
Noncontrolling
interests
US$’000
Total
equity
US$’000
152,076
4,707
62,204
−
15,082
234,069
3
234,072
Profit for the year
Increase in fair value
investments
Impairment loss
investments
Reversal on sale
investments
Foreign currency
translation
Other
comprehensive
income/(loss), net
of tax
Total comprehensive
income/(loss) for
the year
Repurchase of shares
Acquisition of a
subsidiary
Dividends paid to equity
holders of the
Company (Note 8)
Balance at 30 June
2011
−
−
−
−
49,911
49,911
331
50,242
−
−
14,967
−
−
14,967
1
14,968
−
−
500
−
−
500
−
500
−
−
(16,000)
−
−
(16,000)
−
(16,000)
−
8,772
−
−
−
8,772
(1)
8,771
−
8,772
(533)
−
–
8,239
−
8,239
−
(67)
8,772
−
(533)
−
−
−
49,911
−
58,150
(67)
331
−
58,481
(67)
−
−
−
−
(4,179)
(4,179)
22,518
18,339
−
−
−
−
(3,696)
(3,696)
−
(3,696)
152,009
13,479
61,671
−
57,118
284,277
22,852
307,129
30
ANNUAL REPORT 2012
STATEMENTS OF CHANGES IN EQUITY (CONT’D)
Investment Accumulated
profits/
revaluation
(losses)
reserve
US$’000
US$’000
Total
equity
US$’000
Company
Share
capital
US$’000
152,009
67,617
(4,230)
215,396
Profit for the year
Decrease in fair value of available-for-sale investments
Impairment loss on available-for-sale investments
Other comprehensive loss, net of tax
Total comprehensive (loss)/income for the year
Dividends paid to equity holders of the Company (Note 8)
Balance at 30 June 2012
−
−
−
−
−
−
−
152,009
−
(46,392)
22
175
(46,195)
(46,195)
−
21,422
44,059
−
−
−
−
44,059
(3,641)
36,188
44,059
(46,392)
22
175
(46,195)
(2,136)
(3,641)
209,619
152,076
76,318
(34,612)
193,782
Profit for the year
Increase in fair value of available-for-sale investments
Other comprehensive loss, net of tax
Total comprehensive income/(loss) for the year
Dividends paid to equity holders of the Company (Note 8)
Balance at 30 June 2011
−
−
−
−
−
−
(67)
−
152,009
−
897
(9,903)
305
(8,701)
(8,701)
−
−
67,617
34,078
−
−
−
−
34,078
−
(3,696)
(4,230)
34,078
897
(9,903)
305
(8,701)
25,377
(67)
(3,696)
215,396
ANNUAL REPORT 2012
31
CONSOLIDATED CASH FLOW STATEMENT
Group
2012
US$’000
2011
US$’000
Cash flows from operating activities
Profit before tax
Adjustments for :
Share of results of an associate
Depreciation expense
Dividend income
Interest income
Net foreign exchange gain
(Gain)/loss on disposal of property, plant and equipment
Gain on disposal of held-for-trading investments
Gain on disposal of an associate
Gain on disposal of available-for-sale investments
Loss on disposal of other financial assets at fair value through profit or loss
Change in fair value of held-for-trading investments
Change in fair value of derivative financial instruments
Change in fair value of other financial assets at fair value through profit or loss
Gain on re-measurement to fair value of available-for-sale investments
Negative goodwill
Operating cash flows before changes in working capital
45,816
50,231
(6,409)
3,741
(7,507)
(1,446)
(144)
(56)
(1,098)
(40)
(3,763)
99
583
3,409
395
65
(27,460)
−
6,185
−
807
(7,247)
(833)
(473)
185
(1,239)
−
(18,089)
−
910
(3,086)
−
2,908
(15,328)
(7,858)
888
Changes in working capital :
Proceeds from disposal of held-for-trading investments
Purchase of held-for-trading investments
Receivables
Payables
Inventories
10,263
(18,534)
(5,791)
2,384
1,980
16,011
(23,616)
1,729
1,672
(3,131)
(3,513)
1,371
7,507
998
(1,337)
5,026
(6,447)
810
7,247
−
(2,790)
(1,180)
Cash flows used in operating activities
Interest received
Dividends received from investment securities
Dividends received from an associate
Income tax paid
Net cash flows from/(used in) operating activities
32
ANNUAL REPORT 2012
CONSOLIDATED CASH FLOW STATEMENT (CONT’D)
Group
2012
US$’000
2011
US$’000
Cash flows from investing activities
Acquisition of a subsidiary
Proceeds from disposal of an associate
Purchase of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Purchase of available-for-sale investments
Proceeds from disposal of available-for-sale investments
Purchase of other financial assets at fair value through profit or loss
Proceeds from disposal of other financial assets at fair value through profit or loss
−
40
(2,208)
2,187
(6,831)
5,395
(1,242)
6,240
15,192
−
(470)
1,201
(11,358)
39,620
(23,212)
34,049
Net cash flows from investing activities
3,581
55,022
Cash flows from financing activities
Share repurchase
Dividends paid to equity holders of the Company
Dividends paid to non-controlling interests of subsidiary
Acquisition of non-controlling interests of subsidiary without a change in control
−
(3,641)
(1,187)
(729)
(67)
(3,696)
−
−
Net cash flows used in financing activities
(5,557)
(3,763)
Net increase in cash and bank balances
Cash and bank balances at beginning of year
3,050
78,556
50,079
28,477
Cash and bank balances at end of year
Pledged deposits
Cash and cash equivalents at end of year
81,606
(2,476)
79,130
78,556
(800)
77,756
ANNUAL REPORT 2012
33
NOTES TO THE FINANCIAL STATEMENTS
These notes form an integral part of and should be read in conjunction with the accompanying financial statements.
1.
General information
Chuan Hup Holdings Limited (the “Company”) is a limited liability company incorporated and domiciled in the
Republic of Singapore. Its registered office and principal place of business is located at 390 Jalan Ahmad
Ibrahim, Singapore 629155. The Company is listed on the Singapore Exchange Securities Trading Limited.
The principal activities of the Company include investment holding and trading activities as well as provision of
management services. There has been no significant change in the nature of these activities from the previous
financial year.
The principal activities of its subsidiaries, associates and jointly controlled operations are set out in Notes 11 and
12 to the financial statements.
The consolidated financial statements relate to the Company and its subsidiaries (referred to as the Group) and
the Group’s interest in associates.
2.
Summary of significant accounting policies
2.1
Basis of preparation
The consolidated financial statements of the Group and the statement of comprehensive income, balance sheet
and statement of changes in equity of the Company have been prepared in accordance with Singapore Financial
Reporting Standards (“FRS”).
The financial statements have been prepared on a historical cost basis except as disclosed in the accounting
policies below.
The financial statements are presented in United States dollars (“USD” or “US$”) and all values in the tables
are rounded to the nearest thousand (US$’000) as indicated.
2.2
Changes in accounting policies
The accounting policies adopted are consistent with those of the previous financial year except in the current
financial year, the Group has adopted all the new and revised standards and Interpretations of FRS (“INT FRS”)
that are effective for annual periods beginning on or after 1 July 2011. The adoption of these standards and
interpretations did not have any effect on the financial performance or position of the Group and the Company.
34
ANNUAL REPORT 2012
2.
Summary of significant accounting policies (cont’d)
2.3
Standards issued but not yet effective
The Group has not adopted the following standards and interpretations that have been issued but not yet
effective :
Effective for annual
periods beginning on or
after
Amendments to FRS 12 Deferred Tax: Recovery of Underlying Assets
Amendments to FRS 1 Presentation of Items of Other Comprehensive Income
Revised FRS 19 Employee Benefits
Revised FRS 27 Separate Financial Statements
Revised FRS 28 Investments in Associates and Joint Ventures
FRS 110 Consolidated Financial Statements
FRS 111 Joint Arrangements
FRS 112 Disclosures of Interests in Other Entities
FRS 113 Fair Value Measurements
Amendments to FRS 107 Offsetting of Financial Assets and Financial Liabilities
1 January
1 July
1 January
1 January
1 January
1 January
1 January
1 January
1 January
1 January
1 January
2012
2012
2013
2013
2013
2013
2013
2013
2013
2013
2014
Except for the Amendments to FRS 1, FRS 112 and Amendments to FRS 107, the adoption of the other
standards and interpretations above is not expected to have any material impact on the financial statements
in the period of initial application. The nature of the impending changes in accounting policy on adoption of the
Amendments to FRS 1, FRS 112 and Amendments to FRS 107 are described below.
Amendments to FRS 1 Presentation of Items of Other Comprehensive Income
The Amendments to FRS 1 Presentation of Items of Other Comprehensive Income (“OCI”) is effective for
financial periods beginning on or after 1 July 2012.
The Amendments to FRS 1 changes the grouping of items presented in OCI. Items that could be reclassified to
profit or loss at a future point in time would be presented separately from items which will never be reclassified.
As the Amendments only affect the presentations of items that are already recognised in OCI, the Group does
not expect any impact on its financial position or performance upon adoption of this standard.
FRS 112 Disclosures of Interests in Other Entities
FRS 112 is effective for financial periods beginning on or after 1 January 2013.
FRS 112 is a new and comprehensive standard on disclosure requirements for all forms of interests in other
entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles.
FRS 112 requires an entity to disclose information that helps users of its financial statements to evaluate the
nature and risks associated with its interests in other entities and the effects of those interests on its financial
statements. The Group is currently determining the impact of the disclosure requirements. As this is a
disclosure standard, it will have no impact on the financial position and financial performance of the Group when
implemented in 2013.
ANNUAL REPORT 2012
35
2.
2.3
Standards issued but not yet effective (cont’d)
Amendments to FRS 107 Offsetting of Financial Assets and Financial Liabilities are effective for financial periods
beginning on or after 1 January 2013 and interim periods with those annual periods. The required disclosures
should be provided retrospectively.
The amendments to FRS 107 provides disclosure requirements that are intended to help investors and other
financial statement users to better assess the effect or potential effect of offsetting arrangements on a
company’s financial position. The new disclosures require information about the gross amount of financial assets
and liabilities before offsetting and the amounts set-off in accordance with the offsetting model in FRS 32. As
this is a disclosure standard, it will have no impact to the financial position and financial performance of the
Group when implemented in 2013.
2.4
Basis of consolidation and business combinations
a)
Basis of consolidation
Basis of consolidation from 1 July 2009
The consolidated financial statements comprise the financial statements of the Company and its
subsidiaries as at the end of the reporting period. The financial statements of the subsidiaries used in
the preparation of the consolidated financial statements are prepared for the same reporting date as
the Company. Consistent accounting policies are applied to like transactions and events in similar
circumstances.
All intra-group balances, income and expenses and unrealised gains or losses resulting from intra-group
transactions and dividends are eliminated in full.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains
control, and continue to be consolidated until the date that such control ceases.
Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit
balance.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
transaction. If the Group loses control over a subsidiary, it :
36
-
De-recognises the assets (including goodwill) and liabilities of the subsidiary at their carrying
amounts at the date when control is lost;
-
De-recognises the carrying amount of any non-controlling interest;
-
De-recognises the cumulative translation differences recorded in equity;
-
Recognises the fair value of the consideration received;
-
Recognises the fair value of any investment retained;
-
Recognises any surplus or deficit in profit or loss; and
-
Re-classifies the Group’s share of components previously recognised in other comprehensive
income to profit or loss or retained earnings, as appropriate.
ANNUAL REPORT 2012
2.
2.4
Basis of consolidation and business combinations (cont’d)
a)
Basis of consolidation (cont’d)
Basis of consolidation prior to 1 July 2009
Certain of the above-mentioned requirements were applied on a prospective basis. The following
differences, however, are carried forward in certain instances from the previous basis of consolidation :
b)
-
Acquisition of non-controlling interests, prior to 1 July 2009, was accounted for using the parent
entity extension method, whereby, the difference between the consideration and the book value
of the share of net assets acquired was recognised in goodwill;
-
Losses incurred by the Group were attributed to the non-controlling interest until the balance was
reduced to nil. Any further losses were attributed to the Group, unless the non-controlling interest
had a binding obligation to cover these. Losses prior to 1 July 2009 were not reallocated between
non-controlling interest and the owners of the Company; and
-
Upon loss of control, the Group accounted for the investment retained at its proportionate share
of Net Asset Value (“NAV”) at the date control was lost. The carrying values of such investments
as at 1 July 2009 was not restated.
Business combinations
Business combinations from 1 July 2009
Business combinations are accounted for by applying the acquisition method. Identifiable assets
acquired and liabilities assumed in a business combination are measured initially at their fair values at the
acquisition date. Acquisition-related costs are recognised as expenses in the periods in which the costs
are incurred and the services are received.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic
circumstances and pertinent conditions as at the acquisition date. This includes the separation of
embedded derivatives in host contracts by the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed
to be an asset or liability will be recognised in accordance with FRS 39 either in profit or loss or other
comprehensive income. If the contingent consideration is classified as equity, it is not re-measured until
it is finally settled within equity.
In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or
loss.
The Group elects for each individual business combination, whether non-controlling interest in the
acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s
proportionate share of the acquiree’s identifiable net assets.
ANNUAL REPORT 2012
37
2.
2.4
Basis of consolidation and business combinations (cont’d)
b)
Business combinations (cont’d)
Business combinations from 1 July 2009 (cont’d)
Any excess of the sum of fair value of the consideration transferred in the business combination, the
amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously
held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and
liabilities is recorded as goodwill. In instances where the latter amount exceeds the former, the excess is
recognised as gain on bargain purchase in profit or loss on the acquisition date.
Business combinations prior to 1 July 2009
In comparison to the above-mentioned requirements, the following differences applied :
Business combinations are accounted for by applying the purchase method. Transaction costs directly
attributable to the acquisition formed part of the acquisition costs. The non-controlling interest (formerly
known as minority interest) was measured at the proportionate share of the acquiree’s identifiable net
assets.
Business combinations achieved in stages were accounted for as separate steps. Adjustments to those
fair values relating to previously held interests are treated as a revaluation and recognised in equity. Any
additional acquired share of interests did not affect previously recognised goodwill.
When the Group acquired a business, embedded derivatives separated from the host contract by the
acquiree were not reassessed on acquisition unless the business combination resulted in a change in the
terms of the contract that significantly modified the cash flows that otherwise would have been required
under the contract.
Contingent consideration was recognised if, and only if, the Group had a present obligation, the economic
outflow was more likely than not and a reliable estimate was determinable. Subsequent adjustments to
the contingent consideration were recognised as part of goodwill.
2.5
Transactions with non-controlling interests
Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly to owners of
the Company and is presented separately in the consolidated statement of comprehensive income and within
equity in the consolidated balance sheet, separately from equity attributable to owners of the Company.
Changes in the ownership interest in a subsidiary that do not result in a loss of control are accounted for as
equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests
are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the
amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received
is recognised directly in equity and attributed to owners of the Company.
38
ANNUAL REPORT 2012
2.
2.6
Foreign currency
The Group’s financial statements are presented in USD, which is also the Company’s functional currency. Each
entity in the Group determines its own functional currency and items included in the financial statements of
each entity are measured using that functional currency.
a)
Transactions and balances
Transactions in foreign currencies are measured in the respective functional currencies of the Company
and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates
approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in
foreign currencies are translated at the rate of exchange ruling at the end of the reporting period. Nonmonetary items that are measured in terms of historical cost in a foreign currency are translated using
the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair
value in a foreign currency are translated using the exchange rates at the date when the fair value was
determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at
the end of the reporting period are recognised in profit or loss except for exchange differences arising
on monetary items that form part of the Group’s net investments in foreign operations, which are
recognised initially in other comprehensive income and accumulated under foreign currency translation
reserve in equity. On disposal of the foreign operation, the cumulative amount of exchange differences
deferred in other comprehensive income relating to that foreign operation is recognised in profit or loss
as a component of the gain or loss on disposal.
b)
Consolidated financial statements
For consolidation purpose, the assets and liabilities of foreign operations are translated into USD
at the rate of exchange ruling at the end of the reporting period and their profit or loss are translated
at the exchange rates prevailing at the date of the transactions. The exchange differences arising on
the translation are recognised in other comprehensive income. On disposal of a foreign operation, the
component of other comprehensive income relating to that particular foreign operation is recognised in
profit or loss.
2.7
Subsidiaries
A subsidiary is an entity controlled by the Company. Control exists when the Company has the power, directly
or indirectly, to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less
accumulated impairment losses.
ANNUAL REPORT 2012
39
2.
2.8
Associates
An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence.
An associate is equity accounted for from the date the Group obtains significant influence until the date the
Group ceases to have significant influence over the associate.
The Group’s investments in associates are accounted for using the equity method. Under the equity method,
the investments in associates is carried in the balance sheets at cost plus post-acquisition changes in the
Group’s share of net assets of the associates. Goodwill relating to associates is included in the carrying amount
of the investment and is neither amortised nor tested individually for impairment. Any excess of the Group’s
share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities over the cost
of the investment is included as income in the determination of the Group’s share of results of the associate in
the financial year in which the investment is acquired.
The profit or loss reflects the share of the results of operations of the associates. Where there has been a
change recognised in other comprehensive income by the associates, the Group recognises its share of such
changes in other comprehensive income. Unrealised gains or losses resulting from transactions between the
Group and the associates are eliminated to the extent of the interest in the associates.
The Group’s share of profit or loss of its associates is shown on the face of profit or loss after tax.
When the Group’s share of losses in an associate equals or exceeds its interests in the associate, the Group
does not recognise further losses, unless it has incurred obligations or made payments on behalf of the
associate.
After application of the equity method, the Group determines whether it is necessary to recognise an additional
impairment loss on the Group’s investments in its associates. The Group determines at the end of each
reporting period whether there is any objective evidence that the investment in the associate is impaired. If this
is the case, the Group calculates the amount of impairment as the difference between the recoverable amount
of the associate and its carrying values and recognises the amount in profit or loss.
The financial statements of the associates are prepared as of the same reporting period as the Group. Where
necessary, adjustments are made to bring the accounting policies in line with those of the Group.
Upon loss of significant influence over the associate, the Group measures and recognises any retained
investment at its fair value. Any difference between the carrying amount of the associate upon loss of
significant influence and the fair value of the aggregate of the retained investment and proceeds from disposal is
recognised in profit or loss.
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ANNUAL REPORT 2012
2.
2.9
All items of property, plant and equipment are initially recorded at cost. Such cost includes the cost of replacing
part of the property, plant and equipment and borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying property, plant and equipment. The accounting policy for borrowing
costs is set out in Note 2.23. The cost of an item of property, plant and equipment is recognised as an asset if,
and only if, it is probable that future economic benefits associated with the item will flow to the Group and the
cost of the item can be measured reliably.
Subsequent to recognition, all items of property, plant and equipment are measured at cost less accumulated
depreciation and accumulated impairment losses, if any. When significant parts of property, plant and
equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with
specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost
is recognised in the carrying amount of the property, plant and equipment as a replacement if the recognition
criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.
Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation is computed on a
straight-line basis over the estimated useful lives of the assets as follows :
Leasehold improvements, land and building
Vessels
Furniture, fittings, plant and equipment
Motor vehicles
-
5 years to 50 years
25 years
3 years to 13 years
5 years
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in
circumstances indicate that the carrying values may not be recoverable.
The residual value, estimated useful life and depreciation method are reviewed at each financial year end and
adjusted prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefit is
expected from its use or disposal. Any gain or loss on derecognition of the asset is included in profit or loss in
the financial year the asset is derecognised.
2.10
The prepaid lease payment is initially measured at cost. Following initial recognition, prepaid lease payment
is measured at cost less accumulated amortisation. The prepaid lease payment is amortised on a straight-line
basis. Amortisation is computed on a straight-line basis over the period as follows :
Prepaid lease payment
2.11
-
28 years
Club membership
Club membership was acquired separately and was not amortised due to its infinite useful life. The club
membership is tested for impairment annually or more frequently if the events and circumstances indicate that
the carrying values may be impaired. The useful life of club membership is reviewed annually to determine
whether the useful life assessment continues to be supportable. If not, the change in useful life from infinite to
finite is made on a prospective basis.
ANNUAL REPORT 2012
41
2.
2.12
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials, direct
labour costs and those production overheads, where applicable, that have been incurred in bringing the
inventories to that present location and condition. Cost is calculated using the moving weighted average
method. Net realisable value represents the estimated selling price less all estimated costs to completion and
costs to be incurred in marketing, selling and distribution.
In arriving at net realisable values, allowances are made when necessary for obsolete, slow-moving and
defective stocks.
2.13
Impairment of non-financial assets
The Group assesses at the end of each reporting period whether there is an indication that an asset may be
impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the
Group makes an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to
sell and its value in use and is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets. Where the carrying amount of an asset in
cash-generating unit exceeds its recoverable amount, the asset is considered impaired and is written-down to
its recoverable amount. In assessing value in use, the estimated future cash flows expected to be generated
by the asset are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. In determining fair value less costs
to sell, recent market transactions are taken into account, if available. If no such transactions can be identified,
an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share
prices for publicly traded subsidiaries or other available fair value indicators.
Impairment losses of continuing operations are recognised in profit or loss in those expense categories
consistent with the function of the impaired asset, except for assets that are previously revalued where the
revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in other
comprehensive income up to the amount of any previous revaluation.
For assets excluding goodwill, an assessment is made at the end of each reporting period as to whether there is
any indication that previously recognised impairment losses may no longer exist or may have decreased. If such
indication exists, the Group estimates the asset’s or cash-generating unit’s recoverable amount. A previously
recognised impairment loss is reversed only if there has been a change in the estimates used to determine
the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying
amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount
that would have been determined, net of depreciation, had no impairment loss been recognised previously.
Such reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the
reversal is treated as a revaluation increase.
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ANNUAL REPORT 2012
2.
2.14
Financial assets
Initial recognition and measurement
Financial assets are recognised when, and only when, the Group becomes a party to the contractual provisions
of the financial instruments. The Group determines the classification of its financial assets at initial recognition.
When financial assets are recognised initially, they are measured at fair value, plus in the case of financial assets
not at fair value through profit or loss, directly attributable transaction costs.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows :
a)
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held-for-trading and financial
assets designated upon initial recognition at fair value through profit or loss. Financial assets are
classified as held-for-trading if they are acquired for the purpose of selling or repurchasing in the near
term. This category includes derivative financial instruments entered into by the Group that are not
designated as hedging instruments in hedge relationships as defined by FRS 39. Derivatives, including
separated embedded derivatives are also classified as held-for-trading unless they are designated as
effective hedging instruments.
The Group may only designate an instrument at fair value through profit or loss upon initial recognition
when the following criteria are met and the designation is determined on an instrument by instrument
basis :
-
The designation eliminates or significantly reduces the inconsistent treatment that would
otherwise arise from measuring the assets or liabilities or recognising gains or losses on them on
a different basis;
-
The assets and liabilities are part of a group of financial assets, financial liabilities or both
which are managed and their performance evaluated on a fair value basis, in accordance with a
documented risk management or investment strategy; or
-
The financial instrument contains one or more embedded derivatives which significantly modify
the cash flows that otherwise would be required by the contract.
Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at
fair value. Any gains or losses arising from changes in fair value of the financial assets are recognised
in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss include
exchange differences, interest and dividend income.
Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair
value if their economic characteristics and risks are not closely related to those of the host contracts
and the host contracts are not held-for-trading or designated at fair value through profit or loss. These
embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss.
Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the
cash flows that would otherwise be required.
ANNUAL REPORT 2012
43
2.
2.14
Financial assets (cont’d)
Subsequent measurement (cont’d)
b)
Loans and receivables
Non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market are classified as loans and receivables. Subsequent to initial recognition, loans and receivables
are measured at amortised cost using the effective interest method, less impairment. Gains or losses
are recognised in profit or loss when the loans and receivables are derecognised or impaired and through
the amortisation process.
c)
Available-for-sale financial assets
Available-for-sale financial assets include equity and debt securities. Equity investments classified as
available-for-sale are those, which are neither classified as held-for-trading nor designated at fair value
through profit or loss. Debt securities in this category are those which are intended to be held for an
indefinite period of time and which may be sold in response to needs for liquidity or in response to
changes in the market conditions.
After initial recognition, available-for-sale financial assets are subsequently measured at fair value. Any
gains or losses from changes in fair value of the financial assets are recognised in other comprehensive
income, except that impairment losses, foreign exchange gains or losses on monetary instruments and
interest calculated using the effective interest method are recognised in profit or loss. The cumulative
gains or losses previously recognised in other comprehensive income are reclassified from other
comprehensive income to profit or loss as a reclassification adjustment when the financial assets are
derecognised.
Investments in equity instruments whose fair value cannot be reliably measured are measured at cost
less impairment loss.
Derecognition
A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired.
On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of
the consideration received and any cumulative gains or losses that had been recognised in other comprehensive
income are recognised in profit or loss.
All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e.,
the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or
sales of financial assets that require delivery of assets within the period generally established by regulation or
convention in the marketplace concerned.
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ANNUAL REPORT 2012
2.
2.15
Impairment of financial assets
The Group assesses at the end of each reporting period whether there is any objective evidence that a financial
asset is impaired :
a)
Financial assets carried at amortised cost
For financial assets carried at amortised cost, the Group first assesses whether objective evidence of
impairment exists individually for financial assets that are individually significant, or collectively for
financial assets that are not individually significant. If the Group determines that no objective evidence of
impairment exists for an individually assessed financial asset, whether significant or not, it includes the
asset in a group of financial assets with similar credit risk characteristics and collectively assesses them
for impairment. Assets that are individually assessed for impairment and for which an impairment loss is,
or continues to be recognised are not included in a collective assessment of impairment.
If there is objective evidence that an impairment loss on financial assets carried at amortised cost has
been incurred, the amount of the loss is measured as the difference between the asset’s carrying
amount and the present value of estimated future cash flows discounted at the financial asset’s
original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring
any impairment loss is the current effective interest rate. The carrying amount of the asset is reduced
through the use of an allowance account. The impairment loss is recognised in profit or loss.
When the asset becomes uncollectible, the carrying amount of impaired financial assets is reduced
directly or if an amount was charged to the allowance account, the amount charged to the allowance
account is written-off against the carrying values of the financial asset.
To determine whether there is objective evidence that an impairment loss on financial assets has
been incurred, the Group considers factors such as the probability of insolvency or significant financial
difficulties of the debtor and default or significant delay in payments.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised, the previously recognised
impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its
amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.
b)
Financial assets carried at cost
If there is objective evidence (such as adverse changes in the business environment where the issuer
operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment
loss on financial assets carried at cost has been incurred, the amount of the loss is measured as the
difference between the asset’s carrying amount and the present value of estimated future cash flows
discounted at the current market rate of return for a similar financial asset. Such impairment losses are
not reversed in subsequent periods.
ANNUAL REPORT 2012
45
2.
2.15
Impairment of financial assets (cont’d)
c)
Available-for-sale financial assets
In the case of equity investments classified as available-for-sale, objective evidence of impairment
include: (i) significant financial difficulty of the issuer or obligor; (ii) information about significant changes
with an adverse effect that have taken place in the technological, market, economic or legal environment
in which the issuer operates and indicates that the cost of the investments in equity instruments may
not be recovered; and (iii) a significant or prolonged decline in the fair value of the investment below its
costs. ‘Significant’ is to be evaluated against the original cost of the investment and ‘prolonged’ against
the period in which the fair value has been below its original cost.
If an available-for-sale financial asset is impaired, an amount comprising the difference between its
acquisition cost (net of any principal repayment and amortisation) and its current fair value, less any
impairment loss previously recognised in profit or loss, is transferred from other comprehensive income
and recognised in profit or loss. Reversals of impairment losses in respect of equity instruments are not
recognised in profit or loss; increases in their fair value after impairment are recognised directly in other
comprehensive income.
2.16
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand and demand deposits that are readily convertible
to known amount of cash and which are subject to an insignificant risk of changes in value.
2.17
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and the amount of the obligation can be estimated reliably.
Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate.
If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the
provisions are reversed. If the effect of the time value of money is material, provisions are discounted using a
current pre-tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used,
the increase in the provisions due to the passage of time is recognised as a finance cost.
2.18
Financial liabilities
Initial recognition and measurement
Financial liabilities are recognised when, and only when, the Group becomes a party to the contractual
provisions of the financial instruments. The Group determines the classification of its financial liabilities at initial
recognition.
When financial liabilities are recognised initially, they are measured at fair value, plus in the case of financial
liabilities not at fair value through profit or loss directly attributable transaction costs.
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ANNUAL REPORT 2012
2.
2.18
Financial liabilities (cont’d)
Subsequent measurement
The measurement of financial liabilities depends on their classification as follows :
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held-for-trading and financial
liabilities designated upon initial recognition at fair value through profit or loss. Financial liabilities are classified
as held-for-trading if they are acquired for the purpose of selling in the near term. This category includes
derivative financial instruments entered into by the Group that are not designated as hedging instruments in
hedge relationships. Separated embedded derivatives are also classified as held-for-trading unless they are
designated as effective hedging instruments.
Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured at fair value.
Any gains or losses arising from changes in fair value of the financial liabilities are recognised in profit or loss.
Other financial liabilities
After initial recognition, other financial liabilities are subsequently measured at amortised cost using the effective
interest rate method. Gains or losses are recognised in profit or loss when the liabilities are derecognised and
through the amortisation process.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired.
When an existing financial liability is replaced by another from the same lender on substantially different terms
or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a
derecognition of the original liability and the recognition of a new liability and the differences in the respective
carrying amount is recognised in profit or loss.
2.19
Employee benefits
a)
Defined contribution plan
The Group participates in the national pension schemes as defined by the laws of the countries which
it has operations. In particular, the Singapore companies in the Group make contributions to the Central
Provident Fund (“CPF”) scheme in Singapore, a defined contribution pension scheme. Contributions to
defined contribution pension schemes are recognised as an expense in the financial period in which the
related service is performed.
b)
Employee leave entitlement
Employee entitlements to annual leave are recognised when they accrue to employees. A provision is
made for the estimated liability for annual leave as a result of services rendered by employees up to the
end of the reporting period.
c)
Share-based payments
The Group issued equity-settled share-based payments to certain employees. Equity-settled share-based
payments are measured at fair value (excluding the effect of non market-based vesting conditions) at the
date of grant. The fair value determined at the grant date of the equity-settled share-based payment is
expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that
will eventually vest, and adjusted for the effect of non market-based vesting conditions.
ANNUAL REPORT 2012
47
2.
2.20
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured, regardless of when the payment is made. Revenue is measured at the fair
value of consideration received or receivable, taking into account contractually defined terms of payment and
excluding taxes or duty. The Group assesses its revenue arrangements to determine if it is acting as principal or
agent. The following specific revenue recognition criteria must also be met before revenue is recognised :
2.21
a)
Revenue from sale of goods is recognised upon the transfer of significant risk and rewards of ownership
of the goods to the customers, usually on delivery of goods. Revenue is not recognised to the extent
where there are significant uncertainties regarding recovery of the consideration due, associated costs or
the possible return of goods;
b)
Management and agency fees earned from rendering of services are recognised over the service period;
c)
Charter hire income is recognised on a straight-line basis over the charter period;
d)
Dividend income from investment is recognised when the Group’s right to receive payment is
established;
e)
Sale and purchase contracts for held-for-trading and available-for-sale investments are recognised at trade
date;
f)
Interest income is recognised on a time proportionate basis using the effective interest method;
g)
Rental income arising from operating leases on leasehold property is accounted for on a straight-line
basis over the lease terms. The aggregate costs of incentives provided to lessees are recognised as a
reduction of rental income over the lease term on a straight-line basis; and
h)
Revenue from sale of development property is recognised when risks and rewards of ownership has
been transferred to the buyer.
Taxes
a)
Current income tax
Current income tax assets and liabilities for the current and prior periods are measured at the amount
expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted at the end of the reporting
period, in the countries where the Group operates and generates taxable income.
Current income taxes are recognised in profit or loss except to the extent that the tax relates to
items recognised outside profit or loss, either in other comprehensive income or directly in equity.
Management periodically evaluates positions taken in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
b)
Deferred tax
Deferred tax is provided using the liability method on temporary differences at the end of the reporting
period between the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes.
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ANNUAL REPORT 2012
2.
2.21
Taxes (cont’d)
b)
Deferred tax (cont’d)
Deferred tax liabilities are recognised for all temporary differences, except :
-
where the deferred tax liability arises from the initial recognition of goodwill or of an asset or
liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss; and
-
in respect of taxable temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, where the timing of the reversal of temporary
differences can be controlled and it is probable that the temporary differences will not reverse in
the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax
credits and unused tax losses, to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences and the carry forward of unused tax credits and unused tax
losses can be utilised except :
-
where the deferred tax asset relating to the deductible temporary differences arises from the
initial recognition of an asset or liability in a transaction that is not a business combination and, at
the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
-
in respect of deductible temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, deferred tax assets are recognised only to the extent
that it is probable that the temporary differences will reverse in the foreseeable future and taxable
profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part
of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of
each reporting period and are recognised to the extent that it has become probable that future taxable
profit will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the financial
year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been
enacted or substantively enacted at the end of the reporting period.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or
loss. Deferred tax items are recognised in correlation to the underlying transaction either in other
comprehensive income or directly in equity and deferred tax arising from a business combination is
adjusted against goodwill on acquisition.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off
current income tax assets against current income tax liabilities and the deferred taxes relate to the same
taxable entity and the same taxation authority.
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate
recognition at that date, would be recognised subsequently if new information about facts and
circumstances changed. The adjustment would either be treated as a reduction to goodwill (as long as it
does not exceed goodwill) if it incurred during the measurement period or in profit or loss.
ANNUAL REPORT 2012
49
2.
2.21
Taxes (cont’d)
c)
Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax except :
-
Where the goods and services tax incurred in a purchase of assets or services is not recoverable
from the taxation authority, in which case the goods and services tax is recognised as part of the
cost of acquisition of the asset or as part of the expense item as applicable; and
-
Receivables and payables that are stated with the amount of goods and services tax included.
The net amount of goods and services tax recoverable from, or payable to, the taxation authority is
included as part of receivables or payables in the balance sheets.
2.22
Share capital and share issue expenses
Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs directly
attributable to the issuance of ordinary shares are deducted against share capital.
2.23
Borrowing costs
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the
acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the
activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing
costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their
intended use or sale. All other borrowing costs are expensed in the financial period they occur. Borrowing costs
consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
2.24
Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of the
arrangement at inception date: whether fulfilment of the arrangement is dependent on the use of a specific
asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified
in an arrangement.
For arrangements entered into prior to 1 January 2005, the date of inception is deemed to be 1 January 2005 in
accordance with the transitional requirements of INT FRS 104.
a)
As lessee
Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership
of the leased item are capitalised at the inception of the lease at the fair value of the leased asset, or, if
lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the
amount capitalised. Lease payments are apportioned between the finance charges and reduction of the
lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance
charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the financial
periods in which they are incurred.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and
the lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the
lease term.
Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the
lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of
rental expense over the lease term on a straight-line basis.
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ANNUAL REPORT 2012
2.
2.24
Leases (cont’d)
b)
As lessor
Leases where the Group retains substantially all the risks and rewards of ownership of the assets are
classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to
the carrying amount of the leased asset and recognised over the lease term on the same basis as rental
income. The accounting policy for rental income is set out in Note 2.20. Contingent rents are recognised
as revenue in the financial period in which they are earned.
2.25
Segment reporting
For management purposes, the Group is organised into operating segments based on their products and
services which are independently managed by the respective segment managers responsible for the
performance of the respective segments under their charge. The segment managers report directly to the
management of the Company who regularly review the segment results in order to allocate resources to the
segments and to assess the segment performance. Additional disclosures on each of these segments are
shown in Note 30, including the factors used to identify the reportable segments and the measurement basis of
segment information.
2.26
Contingencies
A contingent liability is :
a)
a possible obligation that arises from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the
Group; or
b)
a present obligation that arises from past events but is not recognised because :
(i)
It is not probable that an outflow of resources embodying economic benefits will be required to
settle the obligation; or
(ii)
The amount of the obligation cannot be measured with sufficient reliability.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only
by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the
Group.
Contingent liabilities and assets are not recognised on the balance sheet of the Group, except for contingent
liabilities assumed in a business combination that are present obligations and which the fair value can be reliably
determined.
2.27
Related parties
A related party is defined as follows :
(a)
A person or a close member of that person’s family is related to the Group and Company if that person :
(i)
Has control or joint control over the Company;
(ii)
Has significant influence over the Company; or
(iii)
Is a member of the key management personnel of the Group or the Company or of a parent of the
Company.
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51
2.
2.27
Related parties (cont’d)
(b)
3.
An entity is related to the Group and the Company if any of the following conditions applies :
(i)
The entity and the Company are members of the same group (which means that each parent,
subsidiary and fellow subsidiary is related to the others);
(ii)
One entity is an associate or joint venture of the other entity (or an associate or joint venture of a
member of a group of which the other entity is a member);
(iii)
Both entities are joint ventures of the same third party;
(iv)
One entity is a joint venture of a third entity and the other entity is an associate of the third entity;
(v)
The entity is a post-employment benefit plan for the benefit of employees of either the Company
or an entity related to the Company;
(vi)
The entity is controlled or jointly controlled by a person identified in (a); or
(vii)
A person identified in (a)(i) has significant influence over the entity or is a member of the key
management personnel of the entity (or of a parent of the entity).
Significant accounting estimates and judgements
The preparation of the Group’s financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosures
of contingent liabilities at the end of the reporting period. However, uncertainty about these assumptions and
estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset
or liability affected in the future periods.
3.1
Judgements made in applying accounting policies
In the process of applying the Group’s accounting policies, management has made the following judgements,
apart from those involving estimations, which has the most significant effect on the amounts recognised in the
financial statements :
a)
Impairment of available-for-sale investments
The Group records impairment charges on available-for-sale equity investments when there has been
a significant or prolonged decline in the fair value below their cost. The determination of what is
“significant” or “prolonged” requires judgement. In making this judgement, the Group evaluates, among
other factors, historical share price movements and the duration and extent to which the fair value of an
investment is less than its cost. For the financial year ended 30 June 2012, the amount of impairment
loss recognised for available-for-sale financial assets was US$583,000 (2011: US$910,000).
52
ANNUAL REPORT 2012
3.
Significant accounting estimates and judgements (cont’d)
3.1
Judgements made in applying accounting policies (cont’d)
b)
Impairment of investments in subsidiaries and associates
Determining whether investments in subsidiaries and associates are impaired requires an estimation
of the fair values less cost to sell and value in use of those investments. The process requires the
Company to estimate the future cash flows expected from the cash-generating units and appropriate
discount rate in order to calculate the present value of the future cash flows. Management has evaluated
the recoverability of those investments based on such estimates and is satisfied that the allowance for
impairment, where necessary is adequate. The carrying amounts of these investments as at financial
year end are disclosed in Notes 11 and 12 to the financial statements.
3.2
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the
reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are discussed below :
a)
Useful lives of plant and equipment
The cost of plant and equipment for the manufacture of electronics is depreciated on a straight-line basis
over the plant and equipment’s estimated economic useful lives. Management estimates the useful lives
of these plant and equipment to be within 3 to 10 years. These are common life expectancies applied in
the electronics industry. Changes in the expected level of usage and technological development could
impact the economic useful lives of these assets, therefore, future depreciation charges could be revised.
The carrying amount of the Group’s plant and equipment at the end of each reporting period is disclosed
in Note 9 to the financial statements.
b)
Allowance for impairment for amounts due from subsidiaries
The Group makes allowance for impairment for amounts due from subsidiaries based on an assessment
of the recoverability of these receivables. Allowance is applied to amounts due from subsidiaries where
events or changes in circumstances indicate that the balances may not be collectible. The identification
of impairment requires the use of judgement and estimates. Where the expectation is different from the
original estimate, such differences will impact the carrying value of amounts due from subsidiaries and
allowance for impairment in the financial period in which such estimate has been changed. The carrying
amounts of these receivables and allowance at the end of the reporting period are disclosed in Note 19
to the financial statements.
c)
Allowance for inventories
The Group reviews its inventory levels in order to identify slow moving and obsolete merchandise.
Where the Group identifies items of inventory that have a market price that is lower than its carrying
amount, the Group estimates the amount of inventory loss as allowance on inventory. Market price
is generally the merchandise selling price quoted from the market of similar items. Management is
satisfied that adequate allowance for slow moving and obsolete merchandise has been made in the
financial statements. The carrying amount of inventories at the end of the reporting period is disclosed in
Note 21 to the financial statements.
ANNUAL REPORT 2012
53
3.
Significant accounting estimates and judgements (cont’d)
3.2
Key sources of estimation uncertainty (cont’d)
d)
Allowance for doubtful debts
The policy for allowance for doubtful debts of the Group is based on the evaluation of collectability
and aging analysis of accounts and management’s estimates. A considerable amount of estimation
is required in assessing the ultimate realisation of these receivables, including the creditworthiness
and the past collection history of each customer. Management has evaluated the collectability of
these receivables and is satisfied that the allowance for doubtful debts is not necessary. The carrying
amounts of these receivables at the end of the reporting period are disclosed in Note 17 to the financial
statements.
4.
Revenue
Group
Dividend income from :
- Quoted equity investments
- Subsidiaries
- Associates
Gain on disposal of held-for-trading investments to :
- External parties
- Subsidiaries
Interest income from :
- External parties
- Associates
Charter hire income
Sale of goods
Sale of property
Rental income
Rendering of management and other services to :
- External parties
- Subsidiaries
Others
54
ANNUAL REPORT 2012
Company
2012
2011
US$’000
US$’000
2012
US$’000
2011
US$’000
7,507
−
7,247
−
6,448
3,493
6,766
7,493
−
−
998
−
1,098
−
1,239
−
58
1,920
1,172
500
1,446
−
−
234,047
69
3,218
832
1
16
42,455
47
927
676
−
−
−
−
−
563
−
−
−
−
−
631
−
1,449
249,465
496
−
151
53,411
−
734
−
14,327
4
983
−
17,481
5.
Profit before tax
Profit before tax for the financial year has been arrived at after crediting/(charging) the following items :
Group
Other gains, net
Gain on re-measurement to fair value of availablefor-sale investments *
Gain/(loss) on disposal of available-for-sale
investments
Loss on disposal of other financial assets at fair
value through profit or loss
Gain on disposal of associate
Gain/(loss) on disposal of property, plant and
equipment
Change in fair value of held-for-trading investments
Change in fair value of derivative financial
instruments
Other income
Negative goodwill
Reversal of allowance for doubtful receivables
from subsidiaries
Foreign exchange (loss)/gain
Total
*
2012
US$’000
2011
US$’000
2012
US$’000
Company
2011
US$’000
27,460
15,328
37,661
−
3,763
18,089
(22)
9,893
(99)
40
−
−
−
−
−
−
56
(3,409)
(185)
3,086
50
(2,525)
(3)
2,287
(395)
731
−
−
74
7,858
(102)
4
−
−
−
−
−
(1,676)
26,471
−
4,723
48,973
−
(424)
34,642
3,456
4,850
20,483
During the financial year 2012, the Group and the Company had recognised fair value gain arising from the
reclassification of investments in CH Offshore Limited from an available-for-sale investment into an associate (2011:
the fair value gain was from the reclassification of investments in PCI Limited from an available-for-sale investment to a
subsidiary).
Profit before tax for the financial year has been arrived at after charging the following items :
Group
Employee benefits expense (including
directors’ remuneration and directors’ fees)
Salaries, allowances and others
Defined contribution plans
Total
Auditors’ remuneration
Audit fees :
Auditor of the Company
Other auditors
Non-audit fees :
Auditor of the Company
Other auditors
Total
2012
US$’000
2011
US$’000
2012
US$’000
Company
2011
US$’000
9,481
617
10,098
5,507
201
5,708
2,157
83
2,240
4,132
89
4,221
198
41
85
28
68
−
64
−
21
3
263
41
16
170
8
−
76
41
−
105
ANNUAL REPORT 2012
55
6.
Income tax (benefit)/expense
a)
The major components of income tax (benefit)/expense are as follows :
Group
Current income tax
(Over)/underprovision in respect of prior
years
Deferred tax (Note 14)
Income tax (benefit)/expense recognised
in profit or loss
b)
2011
US$’000
1,267
421
5
79
(1,746)
(240)
(176)
(256)
−
−
110
−
(719)
(11)
5
189
A reconciliation between tax (benefit)/expense and the product of accounting profit multiplied by the
applicable statutory tax rate for the financial years ended 30 June 2012 and 2011 are as follows :
Profit before tax
45,816
50,231
44,064
34,267
Tax at statutory rate of 17% (2011: 17%)
Loss not subject to tax (1)
Non-deductible/non-taxable items
Utilisation of deferred tax benefits
previously not recognised
Effect of partial tax exemption
(Over)/underprovision in respect of prior
years
Withholding tax on overseas income
Effect of different tax rate
Deferred tax benefits not recognised
Share of results of associate
Others
Income tax (benefit)/expense recognised
in profit or loss
7,789
−
(5,324)
8,539
46
(8,875)
7,491
−
(7,209)
5,825
−
(5,860)
(333)
(74)
(421)
(23)
(250)
−
(280)
(20)
(1,746)
15
(25)
19
(1,090)
50
(176)
11
135
1,019
−
(266)
−
5
−
−
−
(32)
110
10
−
404
−
−
(719)
(11)
5
189
(1)
c)
Mainly pertains to expenses incurred/income derived from shipping operations which is exempted from income
tax under Section 13A of the Singapore Income Tax Act, Cap. 134.
Subject to agreement by the relevant tax authorities, the Group has unutilised tax losses and capital
allowances estimated as follows :
Group
Unutilised tax losses
Capital allowances
Deferred tax asset not recognised
56
Company
2012
2011
US$’000
US$’000
2012
US$’000
ANNUAL REPORT 2012
Company
2012
2011
US$’000
US$’000
2012
US$’000
2011
US$’000
10,448
−
10,448
12,270
11
12,281
909
−
909
2,379
−
2,379
1,857
2,171
154
404
6.
Income tax (benefit)/expense (cont’d)
These future income tax benefits are available for an unlimited future period only if the Company and
certain subsidiaries derive future assessable income of a nature and of sufficient amounts to enable
the benefits to be realised and the conditions for deductibility imposed by the tax legislation of their
respective countries of incorporation, including the retention of majority shareholders as defined are
complied with. Deferred tax asset is not recognised due to uncertainty of future taxable profits.
7.
Earnings per share
Basic and fully diluted earnings per share attributable to the ordinary equity holders of the Company is computed
by dividing profit attributable to equity holders of the Company by the weighted average number of ordinary
shares in issue during the financial year :
Group
Earnings (US$’000) :
Profit attributable to equity holders of the Company
Number of shares (’000) :
Weighted average number of ordinary shares
2012
2011
44,459
49,911
933,532
933,576
4.76
5.35
Basic earnings per share is the same as fully diluted earnings per share as the Group does not have any
potential dilutive ordinary shares outstanding.
8.
Dividends
Group and Company
2012
2011
US$’000
US$’000
Dividends on ordinary shares paid during the financial year :
Final tax exempt (one-tier) dividend for 2011: S$0.005 (2010: nil) per share
Interim tax exempt (one-tier) dividend for 2012: nil (2011: S$0.005) per share
3,641
−
3,641
−
3,696
3,696
7,346
3,799
After the reporting period, the directors proposed the following dividend :
Final tax exempt (one-tier) dividend for 2012: S$0.010 (2011: S$0.005) per share
The proposed dividend is subject to approval by shareholders at the forthcoming Annual General Meeting. Upon
approval, it will then be accounted for as an appropriation of accumulated profits.
ANNUAL REPORT 2012
57
9.
Vessels
US$’000
Furniture,
fittings,
plant and
equipment
US$’000
Motor
vehicles
US$’000
Total
US$’000
4,354
(170)
18
−
4,202
2,458
–
−
(2,458)
−
27,454
(9)
2,190
(1,197)
28,438
267
−
−
(159)
108
78,265
(2,478)
2,208
(3,814)
74,181
34,826
8,906
−
−
−
43,732
2,212
303
−
−
1,839
4,354
4,042
−
−
(1,584)
−
2,458
577
134
470
(501)
26,774
27,454
267
−
−
−
−
267
41,924
9,343
470
(2,085)
28,613
78,265
Accumulated
depreciation
At 1 July 2011
Exchange differences
Depreciation for the year
Disposals
At 30 June 2012
−
−
−
−
−
4,317
(165)
15
−
4,167
325
−
2
(327)
−
22,909
(27)
2,541
(1,197)
24,226
267
−
−
(159)
108
27,818
(192)
2,558
(1,683)
28,501
At 1 July 2010
Disposals
At 30 June 2011
−
−
−
−
−
−
2,212
302
28
−
1,775
4,317
426
−
106
(207)
−
325
500
130
477
(494)
22,296
22,909
264
−
3
−
−
267
3,402
432
614
(701)
24,071
27,818
Net book value
At 30 June 2012
41,433
35
−
4,212
−
45,680
At 30 June 2011
43,732
37
2,133
4,545
−
50,447
Freehold
land
US$’000
Leasehold
improvements,
land and
building
US$’000
Cost
At 1 July 2011
Additions
Disposals
At 30 June 2012
43,732
(2,299)
−
−
41,433
At 1 July 2010
Additions
Disposals
At 30 June 2011
Group
58
ANNUAL REPORT 2012
9.
Property, plant and equipment (cont’d)
The Group’s major properties are as follows :
Freehold land
Description
Location
Area
Former ABC Site 187-193 (Lot 123)
187 Adelaide Terrace, East Perth,
Australia
12,874 square metres
Description
Location
Area/Tenure
Shipyard
No. 2, Jalan Samulun, Jurong,
Singapore
5,249 square metres/tenure
of 15 years with a further 10
years extension (unexpired
lease term of 3 years and 5
months)
Leasehold land and building
Furniture,
fittings and
equipment
US$’000
Motor
vehicles
US$’000
Total
US$’000
Cost
At 1 July 2011
Additions
Disposals
At 30 June 2012
206
4
(10)
200
266
−
(159)
107
472
4
(169)
307
At 1 July 2010
Additions
Disposals
At 30 June 2011
286
3
(83)
206
266
−
−
266
552
3
(83)
472
Accumulated depreciation
At 1 July 2011
Disposals
At 30 June 2012
184
10
(10)
184
266
−
(159)
107
450
10
(169)
291
At 1 July 2010
Disposals
At 30 June 2011
251
13
(80)
184
263
3
−
266
514
16
(80)
450
Net book value
At 30 June 2012
16
−
16
At 30 June 2011
22
−
22
Company
ANNUAL REPORT 2012
59
10.
Group
Cost
At 1 July
At 30 June
Accumulated depreciation
At 1 July
At 30 June
Net book value
At 30 June
2012
US$’000
2011
US$’000
18,313
(608)
−
17,705
−
162
18,151
18,313
202
(20)
1,183
1,365
−
9
193
202
16,340
18,111
Details of the leasehold property of the Group :
Description
Lease term
Location
Area
Leasehold land and building
60 years from
1 July 1966
322/386/388/390
Jalan Ahmad Ibrahim
Singapore 629151/629156/
629157/629155
76,500 square metres
The fair value of the Group’s leasehold property at 30 June 2012 is US$17,705,000 (equivalent to S$22,500,000)
(2011: US$18,313,000 (equivalent to S$22,500,000)). Fair value has been determined on the basis of valuation
carried out at the financial year end date by an independent valuer having an appropriate recognised professional
qualification and recent experience in the location and category of the property being valued. The valuation was
arrived at by reference to market evidence of transaction prices for similar properties.
The property rental income from the Group’s leasehold property partially leased out under operating lease,
amounted to US$2,901,000 (2011: US$624,000). Direct operating expenses (including repairs and maintenance)
arising from the rental-generating leasehold property amounted to US$2,065,000 (2011: US$553,000).
60
ANNUAL REPORT 2012
11.
Subsidiaries
Equity investments, at cost
Impairment loss
2012
US$’000
Company
2011
US$’000
86,094
(28,733)
57,361
85,365
(28,299)
57,066
28,299
434
28,733
28,299
−
28,299
Movement in allowance for impairment loss :
At 1 July
Impairment loss charged to profit or loss
At 30 June
During the financial year, the Company carried out a review of the recoverable amount of its investments in
subsidiaries. An additional impairment of US$434,000 (2011: nil) was recognised during the financial year in
respect of certain subsidiaries. These subsidiaries had been loss making or dormant. The recoverable amount
of the investments had been determined based on net asset value which was deemed to be the best estimate
of fair value less cost to sell for these subsidiaries.
Details of subsidiaries are :
Country of
incorporation
Principal activities
Proportion of
ownership interest
held by the Group
2012
2011
%
%
Held by the Company :
Beauford Marine Pte Ltd
(1)
Singapore
Ship agent and ship
chartering
100
100
Singapore
Dormant
100
100
Singapore
Investment holding
100
100
Singapore
Investment holding
100
100
Singapore
Investment holding
100
100
Singapore
Dormant
Singapore
Rental and management
of properties
Singapore
Dormant
Singapore
Investment holding
100
100
Singapore
Ship agent and
investment holding
100
100
Singapore
Investment holding and
trading
100
100
Westgarden Development
Pte Ltd (8)
Singapore
Dormant
100
100
(1)
Singapore
Electronics manufacturing
services
76.16
75.19
Cleanway Environmental
Services Pte Ltd (8)
Cresta Investment Pte Ltd
ProVest Global Pte Ltd
(1)
ProVest Holdings Pte Ltd
ProVest Realty Pte Ltd
(1)
(1)
(8)
ProVest Transworld Limited
ProVest Ventures Pte Ltd
Shin Chuan Pte Ltd
(1) (9)
CH BioVest Pte Limited
Ventrade (Asia) Pte Ltd
PCI Limited
(8)
(1) (9)
(1)
(1)
100
100
99.70
99.70
100
100
ANNUAL REPORT 2012
61
11.
Subsidiaries (cont’d)
Country of
incorporation
Proportion of
ownership interest
held by the Group
2012
2011
%
%
Held through subsidiaries :
Held by Cleanway
Environmental Services
Pte Ltd
Cleanway Systems and
Technologies Pte Ltd (8)
Singapore
Dormant
100
100
Held by Ventrade (Asia)
Pte Ltd
96 and 102 Terrace Road Pty
Ltd (2)
Australia
Property development
100
100
(2)
Australia
100
100
British Virgin
Islands
Investment holding
100
100
British Virgin
Islands
Dormant
100
100
provision of support on
electronics manufacturing
services
76.16
75.19
Ventrade Australia Pty Ltd
Held by ProVest Holdings
Pte Ltd
Valcom Holdings Inc
(8) (9)
Held by CH BioVest Pte
Limited
Polytech Investing Ltd
(8)
Held by PCI Limited
Printed Circuits International
Incorporated (1) (8)
United States of
America
(PCI) Phil., Inc. (8)
Philippines
Dormant
45.70
45.11
P.T. Prima Circuitama
Indonesia (4)
Indonesia
Provision of electronics
manufacturing services for
the Group
70.45
69.55
P.T. PCI Elektronik
Internasional (4)
Indonesia
manufacturing services
for the Group
76.16
75.19
British Virgin
Islands
Investment holding
76.16
75.19
Singapore
Investment holding
76.16
75.19
Singapore
Rental of property
76.16
75.19
Pacific Gain Holding Limited
PCI China Private Limited
Quijul Pte Ltd
62
(8)
(1)
(1)
ANNUAL REPORT 2012
11.
Country of
incorporation
Proportion of
ownership interest
held by the Group
2012
2011
%
%
Held through subsidiaries (cont’d) :
Held by Printed Circuits
International Incorporated
Private Limited (1)
Singapore
Rendering of estate
management services to
related company
76.16
75.19
PCI Displays Pte Ltd (1)
Singapore
manufacturing and
information technology
services
76.16
75.19
Singapore
Investment holding
76.16
75.19
Dormant
76.16
75.19
Held by Pacific Gain Holding
Limited
Polymicro Corporation
(Singapore) Pte Ltd (1) (7)
Polymicro Precision Technology
(Thailand) Co. Ltd (5)
Thailand
Technology Enabler Designers
Phils. Inc. (3)
Philippines
Provision of research and
development services
76.16
75.19
PCI-Gaozhi (Shanghai) Electronic
Company Ltd (6)
China
to the Group
68.54
67.67
PCI-Shanghai Electronic
Company Ltd (6)
China
to the Group and third
parties
76.16
75.19
Value added logistics
provider and general
warehousing
76.16
−
Held by PCI China Private Limited
Held by Quijul Pte Ltd
Quijul Logistics Pte Ltd
(1)
Singapore
(1)
Audited by Ernst & Young LLP, Singapore.
(2)
Audited by another firm of auditors (KPMG, Australia).
(3)
Audited by member firm of Ernst & Young Global in Philippines (SGV & Co).
(4)
Audited by another firm of auditors (Drs Bernardi & Co. Registered Public Accountants, Jakarta, Indonesia).
(5)
Audited by another firm of auditors (V.A.T. Accounting).
(6)
Audited by another firm of auditors (Shanghai Linfang Certified Public Accountants, Co. Ltd, Shanghai, China).
(7)
The investment represents 6.09% equity interest held through PCI Limited. The remaining 70.07% equity interest is
held through Pacific Gain Holding Limited, a subsidiary of PCI Limited.
(8)
Not required to be audited under the law in the country of incorporation.
(9)
As at 30 June 2012 and 30 June 2011, the financial statements of these subsidiaries have been prepared on a going
concern basis, where net capital deficiencies aggregate US$42,478,000 (2011: US$45,247,000). The Company has
undertaken to provide continuing financial support to these subsidiaries.
ANNUAL REPORT 2012
63
11.
Acquisition of non-controlling interests
On 26, 28 and 29 June 2012, the Company acquired additional equity interest that amounted to 0.97% in PCI
Limited (“PCI”) from its non-controlling interests for total cash consideration of US$729,000. The carrying value
of the net assets of PCI at 30 June 2012 was US$94,654,000 and the carrying value of the additional interest
acquired was US$918,000. The difference between the consideration and the carrying value of the additional
interest acquired amounted to US$189,000, which was recognised in equity, within capital reserve.
The following summarises the effect of the change in the Group’s ownership interest in PCI on the equity
attributable to equity holders of the Company :
US$’000
Consideration paid for acquisition of non-controlling interests
Decrease in equity attributable to non-controlling interests
Increase in equity attributable to equity holders of the Company
729
(918)
(189)
Acquisition of a subsidiary in 2011
On 12 May 2011 (the “acquisition date”), the Group acquired an additional 39.52% equity interest in PCI, an
electronics manufacturing services company listed on the Singapore Exchange Securities Trading Limited. Upon
the acquisition, PCI became a subsidiary of the Group. The Group had elected to measure the non-controlling
interest at the non-controlling interest’s proportionate share of PCI’s identifiable net assets.
The Group recognised a gain of US$15,328,000 as a result of measuring at fair value its 35.67% equity interest
in PCI held before the business combination. Negative goodwill of US$7,858,000 resulted from the difference
between the net book value and the fair value of the investment property as at the acquisition date. These gains
were included in the “Other gains” line item in the Group’s profit or loss for the financial year ended 30 June
2011. Transaction costs in relation to the acquisition of US$604,000 were recognised in the “Other expenses”
line item in the Group’s profit or loss for the financial year ended 30 June 2011.
From the date of acquisition, PCI had contributed US$43,346,000 of revenue and US$1,448,000 to the
Group’s profit in 2011, before accounting for the non-controlling interest. If the Group had acquired PCI at the
beginning of the financial year ended 30 June 2011, PCI would have contributed US$250,772,000 of revenue and
US$12,770,000 to the Group’s profit for the financial year ended 30 June 2011, before accounting for the noncontrolling interest. No further adjustment was made during the financial year ended 30 June 2012 to the fair
value of the assets and liabilities acquired on the above acquisition.
64
ANNUAL REPORT 2012
12.
Associates and jointly controlled operations
a)
Associates
Group
Equity investments, at cost
Share of post-acquisition reserves
Dividends received
Fair value of investments in associates for
which there is published price quotation
2012
US$’000
2011
US$’000
2012
US$’000
Company
2011
US$’000
47,715
6,373
(998)
53,090
40
(40)
−
−
47,715
−
−
47,715
−
−
−
−
53,943
−
53,943
−
Summarised financial information of the associates not adjusted for the proportion of ownership interest
held by the Group, is as follows :
Group
Total assets
Total liabilities
Net assets
Revenue
Profit for the year
Group’s share of associates’ results for the year
Profit not recognised for the year
2012
US$’000
2011
US$’000
278,168
(22,259)
255,909
6,259
(6,019)
240
51,514
33,433
6,409
−
2,599
1,744
698
698
On 30 September 2011, the Group and the Company had reclassified its investment in CH Offshore Ltd
from an available-for-sale investment to an associate.
During the financial year 2011, the Group did not recognise its share of profit of US$698,000 relating to
Sunbest Transco Limited as the Group’s cumulative share of unrecognised losses with respect to the
associate was US$441,000 at the end of the reporting period.
On 7 July 2011, the Group’s subsidiary company, Cresta Investment Pte Ltd sold its entire interest of
40,000 shares in Sunbest Transco Limited for US$40,000 to Worldwide Rock Investments Ltd (“WWI”).
On the same date, the Group entered into a termination agreement with WWI to liquidate CH Aggregate
Trading Limited. All cost that related to the liquidation of CH Aggregate Trading Limited was borne by
WWI.
ANNUAL REPORT 2012
65
12.
Associates and jointly controlled operations (cont’d)
a)
Associates (cont’d)
Details of associates are :
Country of
incorporation
Held by the Company :
CH Offshore Ltd (1)
Singapore
the owning and
chartering of vessels
Proportion of
ownership interest
held by the Group
2012
2011
%
%
23.71
−
−
40
−
40
Held through subsidiary :
Held by Cresta Investment
Pte Ltd
Sunbest Transco Limited
(2)
CH Aggregate Trading
Limited (3)
(1)
(2)
(3)
b)
Cyprus
Ship chartering
(Middle East)
Dormant
Audited by Deloitte and Touche LLP, Singapore.
Audited by PricewaterhouseCoopers Limited, Cyprus.
Not required to be audited under the law in the country of incorporation.
Jointly controlled operations
Held through subsidiaries :
Held by Ventrade Australia
Pty Ltd
187 Adelaide Terrace Joint
Venture
Held by 96 and 102
Terrace Road Pty Ltd
96 and 102 Terrace Road
Joint Venture
66
Cyprus
ANNUAL REPORT 2012
Australia
50
50
Australia
50
50
13.
Group
Non-current assets
Available-for-sale investments :
- Quoted equity investments, at fair value (a)
- Unquoted equity investments (a)
Current assets
Held-for-trading investments :
- Quoted equity investments, at fair value
Other financial assets at fair value through
profit or loss :
- Unquoted structured deposits (b)
(a)
Company
2012
2011
US$’000
US$’000
2012
US$’000
2011
US$’000
42,267
18,871
61,138
102,977
14,342
117,319
39,372
9,565
48,937
94,213
5,006
99,219
29,964
24,004
4,939
16,346
−
29,964
5,164
29,168
−
4,939
5,367
21,713
The available-for-sale investments in quoted and unquoted equities are held long-term for strategic
purposes in accordance with the Group’s and the Company’s business plans.
Quoted equity investments offer the Group and the Company the opportunity for return through dividend
income and capital gains. The investments in quoted equities include an impairment loss charged to
profit or loss for the financial year of US$175,000 (2011: US$910,000), as there had been significant and
prolonged decline in market prices for certain quoted equities.
The investments in unquoted equities include an impairment loss charged to profit or loss for the financial
year of US$408,000 (2011: nil).
The quoted and unquoted equity investments include investments in certain companies where the Group
has more than 20% effective equity interest. However, it has been determined that the Group does not
have significant influence in these companies as defined by FRS 28 “Investments in Associates” due to
no representation on the board of the investees, non-participation in the policy-making processes including
dividends or other distributions, non-existence of material transactions between the Company and the
investees, no interchange of managerial personnel and no provision of essential technical information to
the investees during the financial year.
(b)
14.
There were no unquoted structured deposits as at 30 June 2012. As at 30 June 2011, the unquoted
structured deposits’ maturity dates ranged from 29 February 2012 to 11 June 2012.
Deferred tax
Consolidated
balance sheet
2012
2011
US$’000
US$’000
Group
Consolidated statement of
comprehensive income
2012
2011
US$’000
US$’000
Deferred tax assets :
Unutilised tax losses
352
212
(155)
(196)
Deferred tax liabilities :
Differences in depreciation for tax purposes
(406)
(491)
(85)
(60)
(240)
(256)
Deferred tax credit
ANNUAL REPORT 2012
67
15.
Other assets
Group
Club membership, at cost
2012
US$’000
2011
US$’000
315
315
Company
2012
2011
US$’000
US$’000
−
−
The fair value of club membership as at 30 June 2012 is US$395,027 (2011: US$432,164).
16.
Group
Cash at bank
Short-term deposits
Total
2012
US$’000
2011
US$’000
50,446
31,160
81,606
47,415
31,141
78,556
Company
2012
2011
US$’000
US$’000
9,253
412
9,665
13,863
1,601
15,464
Short-term deposits are made for varying periods of between two days and three months, depending on the
immediate cash requirements of the Group and the Company. These deposits earn interest at rates ranging
from 0.01% to 7.50% (2011: 0.01% to 7.30%) per annum for the Group and 3.30% to 4.47% (2011: 0.01% to
3.71%) per annum for the Company.
Included in short-term deposits is an amount of US$2,476,000 (2011: US$800,000) pledged to certain financial
institutions for the purpose of foreign exchange forward contracts entered into.
17.
Trade receivables
Group
Amounts due from external parties
Amounts due from associates
Total
2012
US$’000
2011
US$’000
40,641
−
40,641
33,659
1,256
34,915
Company
2012
2011
US$’000
US$’000
15
−
15
−
−
−
Amounts due from external parties
Trade receivables are non-interest bearing and are generally on cash payment to 60 days term. They are
recognised at their original invoice amounts which represent their fair value at initial recognition.
Based on evaluation of creditworthiness and past collection history of receivables, no provision for receivables
that were past due date was necessary.
68
ANNUAL REPORT 2012
17.
Trade receivables (cont’d)
The age analysis of trade receivables is as follows :
Group
Not past due
Past due :
less than 3 months
more than 3 months
Total
2012
US$’000
2011
US$’000
2012
US$’000
Company
2011
US$’000
31,003
27,724
15
−
9,363
275
40,641
5,931
4
33,659
−
−
15
−
−
−
The average age of trade receivables was 40 days (2011: 41 days).
Amounts due from associates
Amounts due from associates are trade-related, non-interest bearing, unsecured, repayable upon demand and
are to be settled in cash.
18.
Other receivables and prepayments
Group
Prepayments
Other receivables
Allowance for impairment
Total
Company
2011
US$’000
2012
US$’000
2011
US$’000
2012
US$’000
772
2,196
2,968
(122)
2,846
572
2,256
2,828
(122)
2,706
4
157
161
(122)
39
3
155
158
(122)
36
Movement in the allowance for impairment account :
Group
At 1 July
Impairment recognised in profit or loss
At 30 June
2012
US$’000
2011
US$’000
122
−
122
122
−
122
Company
2012
2011
US$’000
US$’000
122
−
122
122
−
122
Other receivables comprise GST receivables, deposits and amounts receivable.
The allowance for estimated irrecoverable amounts of other receivables was determined by reference to long
outstanding debt that was deemed non-collectible.
There was no other receivable which was past due but not impaired as at 30 June 2012 and 2011.
ANNUAL REPORT 2012
69
19.
Company
2012
2011
US$’000
US$’000
Allowance for impairment
Total
104,048
(47,235)
56,813
82,683
(47,235)
35,448
47,235
−
47,235
50,691
(3,456)
47,235
Movement in the allowance for impairment account :
At 1 July
Reversal of impairment
At 30 June
Amounts due from subsidiaries are unsecured, interest-free, repayable on demand and are to be settled in cash.
20.
Derivative financial liabilities
Derivative financial instruments are instruments whose values change in response to the change in prices of the
underlying instruments.
In the normal course of business, the Group and the Company enters into transactions involving derivative
financial instruments in connection with its investing activities, as well as to manage assets, liabilities and
structural positions. These instruments are subject to various risks similar to non-derivative instruments,
including market price, credit and liquidity risks. Such derivative financial instruments are treated as heldfor-trading financial instruments, initially recognised at fair value on the date on which a derivative contract is
entered into, and subsequently re-measured at fair value. Derivative financial instruments are carried as assets
when fair values are positive and as liabilities when the fair values are negative.
The notional amounts of these derivative instruments reflect the Group’s and the Company’s extent of
involvement in derivative financial instruments. The fair values and notional amounts of the derivative financial
instruments at the end of the reporting period are set out below. These amounts do not necessarily represent
future cash flows and amounts at risk of the derivatives.
Group
Current
Contract/
notional
amount
US$’000
Company
Assets
US$’000
Liabilities
US$’000
Contract/
notional
amount
US$’000
Assets
US$’000
Liabilities
US$’000
2012
Equity and foreign exchange
related contracts
28,614
43
(438)
1,461
−
(102)
2011
Equity and foreign exchange
related contracts
−
−
−
−
−
−
These derivative contracts may be terminated earlier than the maturity dates upon the occurrence of the knockout event as stipulated in the contracts. The derivative contracts’ maturity dates range from 3 August 2012 to 19
June 2013.
70
ANNUAL REPORT 2012
21.
Inventories
Group
Raw materials
Work-in-progress
Finished goods
Total
2012
US$’000
2011
US$’000
23,402
1,979
11,414
36,795
25,652
2,120
11,003
38,775
In the current financial year, the cost of inventories recognised as an expense in cost of sales amounted to
US$187,086,000 (2011: US$34,623,000). This includes the write-down of inventory amounting to US$552,000
(2011: US$19,000) and the cost of raw materials, consumables and overheads for the Group.
22.
Trade payables
Group
Trade payables
Accrued expenses
Total
2012
US$’000
2011
US$’000
37,064
24
37,088
29,247
56
29,303
Company
2012
2011
US$’000
US$’000
−
−
−
−
−
−
Trade payables and accruals primarily comprise amounts outstanding for trade purchases and ongoing costs.
The credit terms on trade purchases normally ranges from cash payment to 60 days terms. The Group has
financial risk management policies in place to ensure that all payables are within the credit timeframe.
23.
Other payables
Group
Accrued expenses
Other payables
Total
2012
US$’000
2011
US$’000
18,700
4,203
22,903
24,203
4,101
28,304
Company
2012
2011
US$’000
US$’000
5,099
795
5,894
6,682
346
7,028
Accrued expenses primarily comprise amounts accrued on overheads. Other payables mainly relate to the jointly
controlled operations in Australia.
ANNUAL REPORT 2012
71
24.
2012
US$’000
Company
2011
US$’000
9,676
6,335
The amounts due to subsidiaries are non-trade in nature, unsecured, interest-free, repayable on demand and are
to be settled in cash.
25.
Share capital
Group and Company
2012
Issued and fully paid ordinary shares :
At 1 July
At 30 June
2011
No. of
shares
‘000
Share
capital
US$’000
No. of
shares
‘000
Share
capital
US$’000
933,532
−
933,532
152,009
−
152,009
933,886
(354)
933,532
152,076
(67)
152,009
The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All
ordinary shares carry one vote per share without restrictions. The ordinary shares have no par value.
During the financial year, there were nil (2011: 354,000 ordinary shares were acquired at US$67,677) ordinary
shares repurchased by way of market acquisition on the Singapore Exchange Securities Trading Limited. Shares
repurchased in 2011 were made out of the Company’s capital and were cancelled.
26.
Reserves
a)
Foreign currency translation reserve
The foreign currency translation reserve represents exchange differences arising from the translation of
the financial statements of foreign operations whose functional currencies are different from that of the
Group’s presentation currency.
b)
Investment revaluation reserve
Investment revaluation reserve represents the cumulative fair value changes, net of tax, of available-forsale financial assets until they are disposed of or impaired.
c)
Capital reserve
Capital reserve arose as a result of changes in the ownership interests of subsidiaries that do not result
in a loss of control and were accounted for as equity transactions.
72
ANNUAL REPORT 2012
27.
Related party transactions
The Group enters into transactions with its related parties in the normal course of business and at arm’s
length. Related parties include the Group’s subsidiaries, associates and their subsidiaries and key management
personnel and their related parties.
Key management personnel refers to the Company’s directors.
a)
In addition to related party information disclosed elsewhere in the financial statements, the significant
transactions with related parties on terms agreed between the parties are as follows :
Group
Transactions with associates :
Charter hire income
Transactions with companies associated
with key management personnel :
Services rendered
Services received
Transactions with subsidiaries :
Sale of held-for-trading investments
Rental expense
b)
Company
2012
2011
US$’000
US$’000
2012
US$’000
2011
US$’000
−
15
−
−
27
1,175
631
804
−
−
−
−
−
−
−
−
13,659
125
6,272
23
Compensation of key management personnel :
Group
Directors’ fees
Short-term benefits
Cost of defined contribution plans
Total
2012
US$’000
2011
US$’000
118
1,988
19
2,125
122
2,877
14
3,013
Company
2012
2011
US$’000
US$’000
118
1,394
15
1,527
122
2,710
13
2,845
The remuneration of the directors is determined by the remuneration committee having regard to the
performance of individuals and market trends.
ANNUAL REPORT 2012
73
28.
Fair value of financial instruments
a)
Fair value of financial instruments that are carried at fair value
The following table shows an analysis of financial instruments carried at fair value at the end of the
reporting period by level of fair value hierarchy :
Group
74
Note
Quoted prices
in active
markets for
identical
instruments
(Level 1)
US$’000
Significant
Significant
other
observable unobservable
inputs
inputs
(Level 2)
(Level 3)
US$’000
US$’000
Total
US$’000
2012
Financial assets :
Investments at fair value
through profit or loss Held-for-trading investments :
13
29,964
−
−
29,964
- Unquoted equity investments
13
13
42,267
−
−
6,202
−
−
42,267
6,202
Derivative financial instruments :
- Equity and foreign exchange
related contracts
20
−
72,231
43
6,245
−
−
43
78,476
Financial liabilities :
related contracts
20
−
438
−
438
2011
Financial assets :
13
24,004
−
−
24,004
through profit or loss designated at fair value
through profit or loss :
- Unquoted structured deposits
13
−
5,164
−
5,164
13
13
102,977
−
126,981
−
1,265
6,429
−
−
−
102,977
1,265
133,410
ANNUAL REPORT 2012
28.
Fair value of financial instruments (cont’d)
a)
Fair value of financial instruments that are carried at fair value (cont’d)
Company
Note
Quoted prices
in active
markets for
identical
instruments
(Level 1)
US$’000
Significant
Significant
other
observable unobservable
inputs
inputs
(Level 2)
(Level 3)
US$’000
US$’000
Total
US$’000
2012
Financial assets :
13
4,939
−
−
4,939
13
13
39,372
−
44,311
−
6,202
6,202
−
−
−
39,372
6,202
50,513
Financial liabilities :
related contracts
20
−
102
−
102
2011
Financial assets :
13
16,346
−
−
16,346
through profit or loss designated at fair value
through profit or loss :
- Unquoted structured deposits
13
−
5,367
−
5,367
13
13
94,213
−
110,559
−
1,265
6,632
−
−
−
94,213
1,265
117,191
ANNUAL REPORT 2012
75
28.
a)
Fair value of financial instruments that are carried at fair value (cont’d)
Fair value hierarchy
The Group and the Company classify fair value measurements using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. The fair value hierarchy have the following
levels :
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the assets or
liabilities, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (i.e.,
unobservable inputs).
There has been no transfer between Level 1 and Level 2 fair value measurements during the financial
years ended 30 June 2012 and 2011.
Determination of fair value
Quoted equity investments (Note 13): Fair value is determined directly by reference to their published
market price at the end of the reporting period.
Unquoted structured deposits (Note 13), unquoted equity investments (Note 13), and equity and foreign
exchange related contracts (Note 20): Over the counter contracts are valued using quotations provided
by brokers, dealers or any other approved sources, of which fair value is determined based on valuation
techniques using observable market parameters as inputs. Fair value of equity investment in unlisted
fund is determined based on the fund’s net asset value as calculated by the independent administrator of
the fund as at the reporting date.
Certain unquoted equity investments are stated at cost less impairment as the fair value of investments
cannot be reliably measured because the fair value cannot be obtained directly from quoted market price
or indirectly using valuation techniques supported by observable market data.
Movements in Level 3 financial instruments measured at fair value
The following table presents the reconciliation for all financial instruments measured at fair value based
on significant unobservable inputs (Level 3) :
Group
2012
At 1 July 2011 and at 30 June 2012
Unquoted
convertible debt
securities
US$’000
−
2011
At 1 July 2010
Total gains or losses :
- In profit or loss (presented in changes in fair value)
At 30 June 2011
(4,081)
−
Total loss for the year included in profit or loss for assets held at 30 June 2011
(4,081)
4,081
There has been no transfer into or out of Level 3 during the financial years ended 30 June 2012 and 30
June 2011.
76
ANNUAL REPORT 2012
28.
b)
Fair value of financial instruments by classes that are not carried at fair value and whose carrying
amounts are reasonable approximation of fair value
Cash and bank balances, trade and other receivables, amounts due from/to subsidiaries, and trade and
other payables.
The carrying amount of these financial assets and liabilities are reasonable approximation of fair value,
either due to their short-term nature or that they are floating rate instruments that are repriced to market
interest rates on or near the end of the reporting period.
The carrying amounts of loans and receivables and financial liabilities carried at amortised cost are as
follows :
Group
Loans and receivables :
Trade receivables
Other receivables
Total
Financial liabilities carried at
amortised cost :
Trade payables
Other payables
Total
29.
Note
2012
US$’000
2011
US$’000
2012
US$’000
Company
2011
US$’000
16
17
18
19
81,606
40,641
2,074
−
124,321
78,556
34,915
2,134
−
115,605
9,665
15
35
56,813
66,528
15,464
−
33
35,448
50,945
22
23
24
37,088
22,903
−
59,991
29,303
28,304
−
57,607
−
5,894
9,676
15,570
−
7,028
6,335
13,363
Financial risk management objectives and policies
In the normal course of business, the Group is exposed to common financial risks comprising market risk
(including price risk, currency risk and interest rate risk), liquidity risk and credit risk. Risk management policies
are in place to monitor and manage exposures to financial risks. Foreign exchange contracts and various
financial instruments are utilised to manage exposures to foreign exchange and equity price risks arising from
operating, financing and investment activities. Speculative trading activities are not carried out.
There has been no change to the Group’s exposure to these financial risks or the manner in which it manages
and measures the risk.
a)
Market risk management
Market risk refers to the risk arising from uncertainty in the future values of the financial instruments,
resulting from movements in factors such as interest rates, foreign exchange rates and equity prices.
The Group’s exposure to market risk is associated with the future values of its available-for-sale
investments, held-for-trading investments and foreign exchange rates.
ANNUAL REPORT 2012
77
29.
Financial risk management objectives and policies (cont’d)
a)
Market risk management (cont’d)
The Group manages these risks by closely monitoring its investment portfolio with the objective to
reduce market risk exposure within acceptable parameters, to minimise potential adverse effects on the
Group’s financial performance.
i)
Market price risk
Market price risk, is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices (other than those arising from interest rate risk or
currency risk, which are further discussed below), whether those changes are caused by factors
specific to the individual financial instrument or its issuer, or factors affecting similar financial
instruments traded in the market.
The Group and the Company are exposed to market price risk arising from quoted equity
investments classified as held-for-trading, other financial assets at fair value through profit or
loss and available-for-sale, as well as derivative financial instruments. Available-for-sale equity
instruments are held for strategic rather than trading purposes. To manage its exposure to market
price risk, the Group diversifies its investment portfolio within acceptable parameters as endorsed
by the board of directors, through prudent assessment of investments prior to investing and
ongoing monitoring of their performance.
Further details of these quoted equity investments and derivative financial instruments can be
found in Notes 13 and 20 to the financial statements.
The sensitivity analysis below has been determined based on the exposure to market price risk at
the end of the reporting period.
In respect of available-for-sale investments, if equity securities prices had been 5% higher/lower
while all other variables were held constant,

The Group’s and the Company’s profit before tax for the financial year ended 30 June
2012 would both have increased/decreased by US$2,000 (2011: US$155,000 and nil,
respectively) as some of the equity investments classified as available-for-sale had been
impaired; and

The Group’s and the Company’s investment revaluation reserve in equity would
have increased/decreased by US$2,171,000 and US$2,026,000, respectively (2011:
US$5,057,000 and US$4,774,000, respectively).
In respect of held-for-trading investments, other financial assets at fair value through profit or loss
and derivative financial instruments, if equity securities prices had been 5% higher/lower, the
Group’s and the Company’s profit before tax for the financial year ended 30 June 2012 would have
increased/decreased by US$1,478,000 and US$242,000, respectively (2011: US$1,458,000 and
US$1,086,000, respectively).
78
ANNUAL REPORT 2012
29.
a)
ii)
Foreign exchange risk
The Group operates mainly in the Asia Pacific region and has exposure to foreign exchange risk
as a result of transactions denominated in a currency other than the functional currencies of the
respective Group entities. These foreign exchange risk exposures are mainly Singapore dollars
(“SGD”), Australian dollars (“AUD”), Malaysian ringgit (“MYR”), Hong Kong dollars (“HKD”),
Renminbi (“RMB”), Philippines peso (“Peso”) and Indonesian rupiah (“IDR”). The Group’s foreign
exchange exposure also arises from the Group’s investment in foreign operations.
The Group closely monitors the timing of inception and settlement of transactions. It mainly
utilises foreign currency forward contracts to manage its exposure to foreign exchange risks. The
Group’s policies do not allow speculation in foreign currencies.
The table below sets out the Group’s exposure to foreign exchange risk as at the end of the
reporting period. Included in the table are the monetary items of the Group, at US$ equivalent
carrying amount, categorised by currencies :
Group
2012
Financial assets
Cash and bank
balances
Trade receivables
Other receivables
Derivative financial
instruments
Investment
securities
Trade payables
Other payables
instruments
SGD
US$’000
AUD
US$’000
MYR
US$’000
HKD
US$’000
IDR
US$’000
RMB
US$’000
Others
US$’000
Total
US$’000
30,551
524
1,588
6,860
−
16
4
−
−
1,674
−
−
5,520
−
28
5,584
2,107
148
90
−
28
50,283
2,631
1,808
43
−
−
−
−
−
−
43
22,462
55,168
46,016
52,892
899
903
4,352
6,026
−
5,548
−
7,839
5,686
5,804
79,415
134,180
2,192
7,549
81
2,650
−
−
9
−
623
1,388
4,645
1,562
42
609
7,592
13,758
93
9,834
19
2,750
−
−
94
103
−
2,011
−
6,207
−
651
206
21,556
ANNUAL REPORT 2012
79
29.
a)
ii)
Foreign exchange risk (cont’d)
Group
2011
Financial assets
Cash and bank
balances
Trade receivables
Other receivables
Investment
securities
Trade payables
Other payables
SGD
US$’000
AUD
US$’000
MYR
US$’000
HKD
US$’000
IDR
US$’000
RMB
US$’000
Others
US$’000
Total
US$’000
18,147
338
1,518
8,819
−
9
4
−
−
3,093
−
−
6,488
−
24
5,544
1,993
319
97
−
25
42,192
2,331
1,895
80,648
100,651
45,119
53,947
3,108
3,112
753
3,846
−
6,512
−
7,856
5,686
5,808
135,314
181,732
1,825
10,098
11,923
83
2,776
2,859
−
−
−
−
−
−
695
1,114
1,809
3,880
1,799
5,679
29
621
650
6,512
16,408
22,920
Company
2012
Financial assets
Trade receivables
Other receivables
Amounts due from
subsidiaries
Other payables
instruments
Amounts due to
subsidiaries
80
ANNUAL REPORT 2012
SGD
US$’000
AUD
US$’000
MYR
US$’000
HKD
US$’000
Others
US$’000
Total
US$’000
4,750
15
29
3,120
−
−
4
−
−
418
−
−
−
−
−
8,292
15
29
2,995
4,079
11,868
1,042
39,327
43,489
−
−
4
−
2,748
3,166
−
−
−
4,037
46,154
58,527
4,154
−
−
−
16
4,170
14
−
−
88
−
102
1,837
6,005
−
−
−
−
−
88
−
16
1,837
6,109
29.
a)
ii)
Company
2011
Financial assets
Other receivables
Amounts due from
subsidiaries
Other payables
Amounts due to
subsidiaries
SGD
US$’000
AUD
US$’000
MYR
US$’000
HKD
US$’000
Others
US$’000
Total
US$’000
6,411
27
140
−
4
−
2,592
−
−
−
9,147
27
3,407
74,476
84,321
646
35,846
36,632
−
−
4
−
582
3,174
−
−
−
4,053
110,904
124,131
4,839
−
−
−
16
4,855
1,901
6,740
−
−
−
−
−
−
−
16
1,901
6,756
Foreign currency sensitivity analysis
The following table demonstrates the sensitivity to a reasonably possible change of 5% increase/
decrease in the exchange rate of the relevant foreign currencies against the functional currency of
the Group with all other variables held constant. The sensitivity analysis includes all outstanding
foreign currency denominated monetary items and available-for-sales equity instruments.
If the relevant foreign currency weakens by 5% against the functional currency of the Group, profit
before tax and equity will decrease by :
Group
Profit before
tax
Equity
US$’000
US$’000
2012
Singapore dollars
Malaysian ringgit
Australian dollars
Philippines peso
Indonesian rupiah
Renminbi
Hong Kong dollars
1,580
−
352
−
180
13
38
136
14
2,115
7
−
−
−
Company
Profit before
tax
Equity
US$’000
US$’000
112
−
205
−
−
−
20
109
−
1,935
−
−
−
−
ANNUAL REPORT 2012
81
29.
a)
ii)
Foreign currency sensitivity analysis (cont’d)
Group
Profit before
tax
Equity
US$’000
US$’000
2011
Singapore dollars
Malaysian ringgit
Australian dollars
Philippines peso
Indonesian rupiah
Renminbi
Hong Kong dollars
1,045
−
370
−
258
17
25
2,424
51
2,011
7
−
−
−
Company
Profit before
tax
Equity
US$’000
US$’000
638
−
37
−
−
−
20
2,396
−
1,671
−
−
−
−
A 5% strengthening of the relevant foreign currency against the functional currency of each group
entity would have resulted in an equal but opposite effect on the financial statements of the
Group, on the basis that all other variables remain constant.
iii)
Interest rate risk
The Group and the Company are exposed to interest rate risk through the impact of rate changes
on interest-bearing assets and liabilities.
Interest rate sensitivity analysis
The sensitivity analysis is determined based on the exposure to interest rates for cash and cash
equivalents at the end of the reporting period and the stipulated change taking place at the
beginning of the respective financial year.
If interest rates had been 1% higher/lower, being a reasonably possible change, and all other
variables were held constant, the Group’s and the Company’s profit before tax for the financial
year ended 30 June 2012 would have increased/decreased by approximately US$312,000 and
US$4,000, respectively (2011: US$311,000 and US$16,000, respectively).
b)
Liquidity risk
Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial
obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises
primarily from mismatches of the maturities of financial assets and liabilities.
The Group closely monitors its working capital requirements and funds available. Sufficient liquidity is
ensured through efficient cash management and adequate lines of credit. Cash and bank balances are
maintained at a healthy level appropriate to the operating environment and expected cash flows of the
Group.
82
ANNUAL REPORT 2012
29.
b)
Liquidity risk (cont’d)
All financial assets and liabilities held by the Group and the Company at the end of the reporting period
are receivable and repayable on demand or due within one year, except for the investment securities held
long-term for strategic purposes.
The contractual expiry by maturity of the Group’s and the Company’s contingent liabilities, which
relate to financial guarantee contracts that amounted to US$71,000 (2011: US$57,000 and US$53,000,
respectively), is within one year, based on the earliest period in which they can be drawn down.
c)
Credit risk management
Credit risk is the risk of loss that may arise should a counterparty default on its contractual obligations
resulting in financial loss to the Group and the Company. The Group’s and the Company’s exposure to
credit risk arises primarily from trade and other receivables, and investments securities. Cash and shortterm deposits are placed with reputable financial institutions.
At the end of the reporting period, the Group’s and the Company’s maximum exposure to credit risk is
represented by the carrying amount of each class of financial assets recognised on the balance sheet.
(i)
Trade and other receivables
The Group and the Company have policies in place to ensure that active account monitoring
is carried out for the extension of credit terms to customers and only transacts with reputable
and creditworthy counterparties. Before accepting any new customer, the Group assesses the
potential customer’s credit quality. Credit limits are reviewed periodically based on evaluation of
customers’ financial status.
In determining the recoverability of a trade receivable, the Group considers any change in the
credit quality of the trade receivable from the date credit was initially granted up to the end of the
reporting period. The concentration of credit risk is limited due to the customer base being large
and unrelated.
Further details of credit risk on trade and other receivables are disclosed in Notes 17 and 18
respectively.
(ii)
Investment securities and derivative financial instruments
The Group’s credit risk arising from its investment exposures to issuers of financial instruments
is minimised as the Group only transacts with reputable financial institutions that are issued
investment grade credit ratings from internationally recognised credit-rating agencies.
d)
Capital management
The primary objective of the Group’s capital management is to maintain an optimal capital structure
to maximise shareholders’ value and to support business growth, taking into consideration underlying
business risks.
The Group manages its capital through regular reviews to ensure business returns commensurate with
the level of risks and adjustments to capital allocations are made in the light of changes in economic
conditions. No changes were made in the Group’s objectives and policies during the financial years
ended 30 June 2012 and 2011.
ANNUAL REPORT 2012
83
29.
d)
Capital management (cont’d)
Debt/equity ratio, which is computed as total liabilities divided by total shareholders’ equity (excluding
non-controlling interest) for the Group is as follows :
Group
Total liabilities
Equity attributable to the equity holders of the Company
Debt/equity ratio
2012
US$’000
2011
US$’000
64,262
281,920
0.23
63,407
284,277
0.22
The Group is not subject to any externally-imposed capital requirements.
30.
Segment information
For management purposes, the Group is organised into business units based on their products and services and
has five reportable operating segments as follows :
a)
The investment holding segment is the core business segment of the Group and relates to investment
and treasury activities;
b)
The electronics manufacturing services segment is in the business of printed circuit board assembly,
custom user interface design and manufacture, and full turnkey electronics manufacturing;
c)
The property development segment is in the business of property development, rental and management;
d)
The estate management and rental income segment is in the business of rental of premises; and
e)
The vessel management segment is in the business of ship chartering and related agency services.
No operating segment has been aggregated to form the above reportable operating segments.
Management monitors the operating results of its business units separately for the purpose of making decisions
on resource allocation and performance assessment. Segment performance is evaluated based on operating
profit which in certain respects, as explained in the table below, is measured differently from operating profit in
the financial statements.
Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions
with third parties.
84
ANNUAL REPORT 2012
30.
Segment information (cont’d)
Investment
holding
US$’000
2012
Revenue
External sales
Inter-segment sales
Total revenue
Results
Segment profit
Depreciation
Other
gains/(losses), net
Employee benefits
expense
Business
development
expense and other
income/(expenses)
Share of results
of associate
Profit/(loss)
before tax
Income tax
benefit/(expense)
Profit/(loss) for
the year
Other
information
Additions to
property, plant and
equipment
Impairment loss
investments
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Unallocated
corporate liabilities
Total liabilities
Estate
management
Electronics
and rental
Vessel
manufacturing
Property
income management Elimination
services development
US$’000
US$’000
US$’000
US$’000
US$’000
Total
US$’000
10,048
4,650
14,698
234,504
−
234,504
69
−
69
4,507
738
5,245
337
−
337
−
(5,388)
(5,388)
249,465
−
249,465
9,398
(19)
9,379
21,755
(2,536)
19,219
8
−
8
1,191
(1,183)
8
296
(3)
293
−
−
−
32,648
(3,741)
28,907
26,597
(98)
−
−
(28)
−
26,471
(2,575)
(7,342)
−
−
(181)
−
(10,098)
(1,611)
(4,860)
(6)
738
(134)
−
(5,873)
6,409
−
−
−
−
−
6,409
38,199
6,919
2
746
(50)
−
45,816
122
868
−
(271)
−
−
719
38,321
7,787
2
475
(50)
−
46,535
4
2,204
−
−
−
−
2,208
583
−
−
−
−
−
583
222,679
128,328
165
8,511
9,127
−
368,810
368,810
10,746
48,623
80
1,430
902
−
61,781
2,481
64,262
ANNUAL REPORT 2012
85
30.
Investment
holding
US$’000
2011
Revenue
External sales
Inter-segment sales
Total revenue
Results
Segment profit/
(loss)
Depreciation
Other
gains/(losses), net
Employee benefits
expense
Business
development
expense and other
income/(expenses)
Profit/(loss)
before tax
Income tax benefit/
(expense)
Profit/(loss) for
the year
Other
information
Additions to
property, plant and
equipment
Impairment loss
investments
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Unallocated
corporate liabilities
Total liabilities
86
Elimination
US$’000
Total
US$’000
9,700
11,791
21,491
42,534
−
42,534
147
−
147
803
64
867
227
−
227
−
(11,855)
(11,855)
53,411
−
53,411
5,799
(26)
5,773
3,369
(469)
2,900
3
−
3
329
(193)
136
(44)
(119)
(163)
−
−
−
9,456
(807)
8,649
48,904
125
−
−
(56)
−
48,973
(4,474)
(1,020)
−
−
(214)
−
(5,708)
(744)
(804)
(3)
64
(196)
−
(1,683)
49,459
1,201
−
200
(629)
−
50,231
2
14
−
(7)
2
−
11
49,461
1,215
−
193
(627)
−
50,242
4
466
−
−
−
−
470
910
−
−
−
−
−
910
229,663
123,133
177
8,125
9,438
−
370,536
370,536
11,432
45,197
86
1,068
1,163
−
58,946
ANNUAL REPORT 2012
Estate
management
Electronics
and rental
Vessel
manufacturing
Property
income management
services development
US$’000
US$’000
US$’000
US$’000
4,461
63,407
30.
Geographical information
The Group’s operations are mainly located in Philippines, Australia, Singapore, People’s Republic of China,
Indonesia, Malaysia and Middle East.
Revenue by geographical segment is based on the country in which the counterparty is located.
Segment assets and capital expenditure are analysed based on the geographical location of these assets.
Capital expenditure includes the total cost incurred to acquire property, plant and equipment.
The following is an analysis of revenue and carrying amount of assets by geographical location :
Group
Revenue
2012
2011
US$’000
US$’000
Assets
2012
2011
US$’000
US$’000
ASEAN (excluding Singapore)
Singapore
Hong Kong
Australia
Middle East
United Kingdom
Belgium
British Virgin Islands
People’s Republic of China
United States of America
Others
Total
11,638
31,500
629
4,141
5
230
1,753
11,818
73,809
81,990
31,952
249,465
14,928
183,492
11,655
88,137
6
6,473
9,865
−
25,457
16,505
12,292
368,810
2,280
9,211
244
3,148
26
517
414
5,377
13,097
14,740
4,357
53,411
17,995
184,686
11,248
91,474
1,263
6,159
11,412
3,003
25,695
12,791
4,810
370,536
The following is an analysis of non-current assets (excluding financial assets and deferred tax assets) according
to its geographical location :
ASEAN (excluding Singapore)
Singapore
Australia
China
Total
2012
US$’000
2011
US$’000
96
72,369
41,434
1,526
115,425
181
23,689
43,733
1,270
68,873
Information about major customers - electronics manufacturing services
In relation to the electronics manufacturing services revenue of US$234,504,000 (2011: US$42,534,000),
sale of goods to three major customers contributed a total revenue of approximately US$74,794,000 (2011:
US$15,830,000) during the financial year. Sale to each of these customers accounted for more than 10% of the
electronics manufacturing services revenue.
ANNUAL REPORT 2012
87
31.
Contingent liabilities
Group
Bankers’ guarantee issued to customers
(unsecured)
2012
US$’000
2011
US$’000
71
57
Company
2012
2011
US$’000
US$’000
71
53
As at 30 June 2012 and 2011, the Company has issued guarantees to third parties in respect of the ship agency
business of a subsidiary.
As at 30 June 2012, the maximum amount that the Group and the Company would be forced to settle, if the
full guaranteed amount is claimed by the counterparties to the guarantee is US$71,000 (2011: US$57,000 and
US$53,000, respectively).
32.
Commitments
Operating lease commitments - as lessee
The Group and the Company have entered into operating lease agreements for office premises. These noncancellable operating leases have remaining non-cancellable lease terms of up to approximately four years.
In addition, the Group entered into lease agreement with Jurong Town Corporation for a parcel of land where the
leasehold building is located. This lease agreement will expire on 30 June 2026 and the lease rentals are fixed
for the financial period :
Group
Minimum lease payments under operating lease
recognised as an expense in the year
2012
US$’000
2011
US$’000
2,221
2,090
Company
2012
2011
US$’000
US$’000
125
134
Future minimum lease payable under non-cancellable operating leases at the end of the reporting period are as
follows :
Group
Not later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
Total
88
ANNUAL REPORT 2012
2012
US$’000
2011
US$’000
2,014
4,734
8,232
14,980
2,180
5,403
9,573
17,156
Company
2012
2011
US$’000
US$’000
124
−
−
124
128
128
−
256
32.
Commitments (cont’d)
Operating lease commitments - as lessor
The Group has entered into lease agreements on its property, plant and equipment and office premises. These
non-cancellable leases have remaining lease terms of approximately three years.
Future minimum rental receivable under non-cancellable operating leases at the end of the reporting period are
as follows :
Group
2012
2011
US$’000
US$’000
Not later than 1 year
Later than 1 year but not later than 5 years
Total
33.
2,030
902
2,932
1,574
−
1,574
Company
2012
2011
US$’000
US$’000
−
−
−
−
−
−
Approval of the financial statements
The financial statements for the financial year ended 30 June 2012 were approved and authorised for issue by
the board of directors on 31 August 2012.
ANNUAL REPORT 2012
89
STATISTICS OF SHAREHOLDINGS
as at 13 September 2012
SHARE CAPITAL
Total Number of Issued Shares
Issued and Fully Paid-up Capital
Class of Shares
Voting Rights
Treasury Shares
:
:
:
:
:
Size of Shareholdings
933,532,450
S$266,932,342.56
Ordinary shares
One vote per share
Nil
No. of
Shareholders
%
No. of Shares
%
29
5,663
5,138
34
10,864
0.27
52.13
47.29
0.31
100.00
10,217
38,249,124
268,754,219
626,518,890
933,532,450
0.00
4.10
28.79
67.11
100.00
No. of Shares
%
478,264,490
44,413,000
22,607,000
14,176,500
8,766,400
6,981,000
4,506,000
3,590,000
3,250,000
3,010,000
3,000,000
2,304,000
2,210,000
2,150,000
2,015,000
2,008,000
1,964,500
1,700,000
1,580,000
1,429,000
609,924,890
51.23
4.76
2.42
1.52
0.94
0.75
0.48
0.38
0.35
0.32
0.32
0.25
0.24
0.23
0.22
0.22
0.21
0.18
0.17
0.15
65.34
1 – 999
1,000 - 10,000
10,001 - 1,000,000
1,000,001 and above
TOTAL
TWENTY LARGEST SHAREHOLDERS
No.
Shareholder’s Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
PEH KWEE CHIM
DBS NOMINEES PTE LTD
UNITED OVERSEAS BANK NOMINEES PTE LTD
CITIBANK NOMINEES SINGAPORE PTE LTD
OCBC NOMINEES SINGAPORE PTE LTD
DBS VICKERS SECURITIES (SINGAPORE) PTE LTD
UOB KAY HIAN PTE LTD
HSBC (SINGAPORE) NOMINEES PTE LTD
LEONG HEIN HAK
LIM MENG KONG
NG THIN ONN TONY
MAYBANK KIM ENG SECURITIES PTE LTD
SEAH KIOK LENG
LOA SZE PIN
KHONG LAI CHEONG
TAN LAI MENG
PHILLIP SECURITIES PTE LTD
MRS LOH SIN YUN NEE TAN HUI LAN CORRIE
SIMON SEAH SEOW KEE
OCBC SECURITIES PRIVATE LTD
Total:
DIRECT INTEREST
SUBSTANTIAL SHAREHOLDER
PEH KWEE CHIM
DEEMED INTEREST
TOTAL INTEREST
NO. OF
SHARES
%
NO. OF
SHARES
%
NO. OF
SHARES
%
478,264,490
51.23
–
–
478,264,490
51.23
Note:
Based on information available to the Company as at 13 September 2012, approximately 48.74% of the issued ordinary shares of the
Company is held by the public and therefore, Rule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited is
complied with.
90
ANNUAL REPORT 2012
NOTICE OF ANNUAL GENERAL MEETING
(Incorporated in the Republic of Singapore)
(Co. Reg. No. 197000572R)
NOTICE IS HEREBY GIVEN that the FORTY-SECOND ANNUAL GENERAL MEETING of the Company will be held
at The Board Room, 390 Jalan Ahmad Ibrahim, Singapore 629155 on 25 October 2012 at 2.00 p.m. to transact the
following business:
Ordinary Business:
1.
To receive and adopt the Audited Financial Statements for the financial year ended 30 June 2012 together with
the reports of the Directors and the Auditor thereon.
(Resolution 1)
2.
To declare a one-tier tax exempt first and final dividend of 1 SG cent per ordinary share for the financial year
ended 30 June 2012.
(Resolution 2)
3.
To re-elect Mr Lim Kwee Siah, who retires in accordance with Article 81 of the Company’s Articles of
Association, and who, being eligible, offers himself for re-election.
[See Explanatory Note 1]
(Resolution 3)
4.
To re-elect Mr Peh Kwee Chim who retires by rotation in accordance with Article 86 of the Company’s Articles of
Association, and who, being eligible, offers himself for re-election.
[See Explanatory Note 2]
(Resolution 4)
5.
To re-elect Mr Peh Siong Woon Terence, who retires by rotation in accordance with Article 86 of the Company’s
Articles of Association, and who, being eligible, offers himself for re-election.
(Resolution 5)
6.
To approve the payment of fees of SGD142,797 for Non-Executive Directors for the financial year ended 30 June
2012 (FY 2011: SGD150,000).
(Resolution 6)
7.
To re-appoint Messrs Ernst & Young LLP as Auditor of the Company and to authorise the Directors to fix their
remuneration.
(Resolution 7)
Special Business:
8.
To consider, and if thought fit, to pass the following resolution as an Ordinary Resolution:
That authority be and is hereby given to the Directors of the Company to:
(a)
(i)
issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or
otherwise; and/or
(ii)
make or grant offers, agreements or options (collectively, “Instruments”) that might or would
require shares to be issued, including but not limited to the creation and issue of (as well as
adjustments to) warrants, debentures or other instruments convertible into shares,
at any time and upon such terms and conditions and for such purposes and to such persons as the
Directors may in their absolute discretion deem fit; and
(b)
(notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares
in pursuance of any Instrument made or granted by the Directors while this Resolution was in force,
ANNUAL REPORT 2012
91
provided that:
(1)
the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued
in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 50 per cent
of the total number of issued shares in the capital of the Company (as calculated in accordance with
sub-paragraph (2) below), of which the aggregate number of shares to be issued other than on a pro rata
basis to shareholders of the Company (including shares to be issued in pursuance of Instruments made
or granted pursuant to this Resolution) does not exceed 20 per cent of the total number of issued shares
in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);
(2)
(subject to such manner of calculation as may be prescribed by the Singapore Exchange Securities
Trading Limited (the “SGX-ST”)) for the purpose of determining the aggregate number of shares that may
be issued under sub-paragraph (1) above, the percentage of issued share capital shall be based on the
issued shares in the capital of the Company at the time this Resolution is passed, after adjusting for:
(i)
new shares arising from the conversion or exercise of any convertible securities or share options
or vesting of share awards which are outstanding or subsisting at the time this Resolution is
passed; and
(ii)
any subsequent bonus issue or consolidation or subdivision of shares;
(3)
in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of
the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by
the SGX-ST) and the Articles of Association for the time being of the Company; and
(4)
(unless revoked or varied by the Company in General Meeting) the authority conferred by this Resolution
shall continue in force until the conclusion of the next Annual General Meeting of the Company or the
date by which the next Annual General Meeting of the Company is required by law to be held, whichever
is the earlier.
(Resolution 8)
NOTICE IS HEREBY GIVEN that, subject to the approval of shareholders to the first and final dividend (“Final
Dividend”) being obtained at the Forty-Second Annual General Meeting to be held on 25 October 2012, the Transfer
Books and the Register of Members of the Company will be closed on 8 November 2012 for the preparation of
dividend warrants.
Duly completed registrable transfers received by the Company’s Registrar, Tricor Barbinder Share Registration Services
(a division of Tricor Singapore Pte. Ltd.) of 80 Robinson Road, #02-00, Singapore 068898, up to 5.00 p.m. on 7
November 2012, will be registered to determine shareholders’ entitlements to the Final Dividend. Subject to aforesaid,
shareholders whose Securities Accounts with The Central Depository (Pte) Limited are credited with ordinary shares in
the capital of the Company as at 5.00 p.m. on 7 November 2012, will be entitled to the Final Dividend.
The Final Dividend, if so approved by shareholders, will be paid on 23 November 2012.
Dated this 5th day of October 2012
By Order of the Board
Valerie Tan May Wei
Company Secretary
92
ANNUAL REPORT 2012
Explanatory Notes:
1)
Mr Lim Kwee Siah, if re-elected, will continue as a member of the Audit and Remuneration Committees. Mr Lim
is considered a non-independent director.
2)
Mr Peh Kwee Chim, if re-elected, will continue as a member of the Nominating Committee. Mr Peh is
considered a non-independent director.
For the convenience of shareholders, the Company will arrange for a bus to pick up shareholders attending
the above meeting from SBS Bus Stop B23 Boon Lay Way (outside Lakeside MRT Station), on Thursday, 25
October 2012. The bus will leave for Chuan Hup Holdings Limited at 1.15 p.m. sharp on that day.
ANNUAL REPORT 2012
93
IMPORTANT
(Incorporated in the Republic of Singapore)
(Co. Reg. No. 197000572R)
PROXY FORM
1.
For investors who have used their CPF monies to
buy the Company’s shares, the Annual Report 2012
is forwarded to them at the request of their CPF
Approved Nominees and is sent solely FOR THEIR
INFORMATION ONLY.
2.
This Proxy Form is not valid for use by CPF investors
and shall be ineffective for all intents and purposes if
used or purported to be used by them.
I/We
(Name)
(NRIC/Passport Number)
(Address)
of
being a member/members of Chuan Hup Holdings Limited (the ”Company”) hereby appoint
NAME
NRIC/
PASSPORT
NUMBER
ADDRESS
PROPORTION OF
SHAREHOLDINGS
(%)
and/or (delete as appropriate)
or failing him/her, the Chairman of the Forty-Second Annual General Meeting of the Company (“Annual General
Meeting”) as my/our proxy/proxies to attend and to vote for me/us and on my/our behalf at the Annual General Meeting
to be held at The Board Room, 390 Jalan Ahmad Ibrahim, Singapore 629155 on 25 October 2012 at 2.00 p.m. and at
any adjournment thereof.
(Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the
resolutions as set out in the Notice of the Annual General Meeting. In the absence of specific directions, the proxy/
proxies will vote or abstain as he/they may think fit, as he/they will on any matter arising at the Annual General
Meeting.)
NO.
ORDINARY RESOLUTIONS
FOR
1.
Adoption of Financial Statements and Reports
2.
Declaration of First and Final Dividend
3.
Re-election of Mr Lim Kwee Siah in accordance with Article 81
4.
Re-election of Mr Peh Kwee Chim in accordance with Article 86
5.
Re-election of Mr Peh Siong Woon Terence in accordance with Article 86
6.
Approval of Directors’ Fees for the financial year ended 30 June 2012
7.
Re-appointment of Messrs Ernst & Young LLP as Auditor
Ordinary Business
Special Business
8.
Approval of proposed Share Issue Mandate
Dated this
day of
2012

Total Number of Shares Held:
Signature(s) of Member(s) or Common Seal
IMPORTANT:
PLEASE READ NOTES ON THE REVERSE SIDE
AGAINST
Notes:
1.
A member of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint one or two proxies
to attend and vote instead of him. A proxy need not be a member of the Company. The appointment of a proxy or proxies by this
instrument shall not preclude a member from attending and voting in person at the Annual General Meeting. If a member attends
the Annual General Meeting in person, the appointment of a proxy or proxies shall be deemed to be revoked, and the Company
reserves the right to refuse to admit such proxy or proxies to the Annual General Meeting.
2.
Where a member appoints two proxies, the appointment shall be invalid unless he specifies the proportion of his shareholding
(expressed as a percentage of the whole) to be represented by each proxy.
3.
This instrument of proxy or proxies must be signed by the appointor or his duly authorised attorney, or, if the appointer is a corporation, it must be executed either under its common seal or signed by its attorney.
4.
A corporation which is a member may also appoint by resolution of its directors or other governing body an authorised representative or representatives in accordance with its Articles of Association and Section 179 of Singapore Companies Act, Cap. 50, to
attend and vote on its behalf.
5.
This instrument appointing a proxy or proxies (together with the power of attorney if any, under which it is signed or a certified copy
thereof) must be deposited at the registered office of the Company at 390 Jalan Ahmad Ibrahim, Singapore 629155, not less than
48 hours before the time appointed for holding the Annual General Meeting.
6.
A member should insert the total number of shares held in this instrument of proxy. If the member has shares entered against
his name in the Depository Register (as defined in Section 130A of the Singapore Companies Act, Cap 50), he should insert that
number of shares. If the member has shares registered in his name in the Register of Members, he should insert that number of
shares. If the member has shares entered against his name in the Depository Register as well as shares registered in his name in
the Register of Members, he should insert the aggregate number of shares. If no number is inserted, this instrument of proxy will
be deemed to relate to all the shares held by the member.
7.
The Company shall be entitled to reject this instrument of proxy or proxies if it is incomplete, or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in this instrument of proxy. In addition,
in the case of a member whose shares are entered in the Depository Register, the Company may reject any instrument appointing
a proxy or proxies lodged if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register at 48 hours before the time appointed for holding the Annual General Meeting as certified by The Central Depository
(Pte) Limited to the Company.
Chuan Hup Holdings Limited
(Co. Reg. No. 197000572R)
390 Jalan Ahmad Ibrahim, Singapore 629155
Tel: (65) 6559 9700 Fax: (65) 6268 1937
Website: www.chuanhup.com.sg
Email: corpsec_legal@chuanhup.com.sg

CHUAN HUP HOLDINGS LIMITED

Transcription

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